Advisers have launched a scathing attack on the FSA for its handling of Northern Rock, claiming it chose to overburden small advisers while turning a blind eye to the big banks.
The Mortgage Practitioner sole practitioner Danny Lovey says it was obvious that Northern Rock would get into trouble but the FSA chose to bury its head in the sand. He says: “The FSA is driving the stakes in us small guys every day, usually without cause, yet, on its watch, Northern Rock has collapsed which has affected thousands of people. It goes by its own agenda, not the market’s.”
Highclere Financial Services partner Alan Lakey says that the FSA has continued to focus on small firms despite Financial Ombudsman Service records showing 71 per cent of complaints involve banks and insurers while only 12 per cent concern advisers.
He says: “The potential for disaster in big institutions is huge and will affect thousands of people, yet it was only a few years ago the FSA was suggesting regular vetting for small firms, not the big players. This is indicative of the way the FSA has been working – if they are a big firm, don’t worry about them.”
Master Adviser director Doug Brodie says: “Rather than spending their time and effort running around the smaller IFA firms, this must surely be an argument that the FSA should be spending much more of their budget looking at the firms affecting the thousands, not the hundreds of clients.”