In 2012, Apfa renewed its campaign for a long- stop for advisers. We saw an opportunity with the introduction of the Financial Services Bill to raise the issue in Parliament. We prepared our evidence for arguments from the adviser and consumer perspective, and launched our Fair Liability 4 Advice campaign with Zurich.
Early signs were positive. The issue was raised and the minister responded saying the FCA could look at the issue as part of its new work programme. In its 2014/15 business plan, the FCA said it would look at the question along with capital requirements for advice firms.
We have been pressing the FCA on how it intends to take this forward. Apfa has established a working group of members to help develop our argument and will present our conclusions to the FCA next month.
The FCA asked, first: what harm has the absence of a limit done to the advice sector? Second: if there is demonstrable impact, what can be done that would ensure a fair balance between consumers and advice firms?
The first question is misplaced as to prove ‘what would have happened if…’ is impossible. However, I do think it is possible to show the absence of a long-stop has had an effect.
This is a golden chance for progress on this vitally important issue but it will require a constructive approach from the regulator to solve the problem in a way that is equitable to all.
If this has been a concern for your firm and you have any helpful ideas as to the impact it has had on your firm, do not hesitate to get in touch: firstname.lastname@example.org
Chris Hannant is director general at Apfa