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CII criticises FSA plans for firms to vet staff

The Chartered Insurance Institute has attacked the FSA’s proposals to shift responsibility for vetting new employees onto firms, arguing the move could increase misselling.

In its recent consultation paper 05/10 on changes to the FSA Handbook, the regulator suggested dropping “customer controlled functions” from the regulatory regime where individuals are dealing with retail and wholesale customers. The customer controls functions aim to ensure that firms who appoint an approved person to carry out defined functions for customers, must first clear the appointment with the FSA.

CII director general Sandy Scott says vetting individuals dealing with customers is the duty of the FSA, not the firm. He says the decision to pass this responsibility to firms will lead to a rise in misselling and increased costs levied on firms through the Financial Services Compensation Scheme.

Scott says: “We believe that reduction in regulatory standards to achieve short-term cost savings is a false economy. The FSA should think again.”

Wilson Dean Financial Services director Nick Lincoln says: “I’m normally all for cutting regulation but this would mean increasing the workload for us and decreasing the FSA’s workload. It is a lot to ask small IFAs to carry out these checks, especially when the FSA has the resources to do it.”

FSA spokesman Robin Gordon Walker says: “Consultation is closing on the October 31 and we will consider all the responses. We will produce a policy statement in the new year.”


Harrison quits Credit Suisse for Threadneedle

Credit Suisse income manager Leigh Harrison has quit the firm and is rumoured to be joining Threadneedle.Harrison took over running of the fund from top-performer Bill Mott, while Threadneedle suffered the departure of UK equity manager Graham Kitchen to Henderson earlier this year. Threadneedle are expected to announce the signing at noon today.

Invesco VCT to offer 25m in new shares

The Invesco Perpetual Aim VCT will offer 25m in new ordinary shares in January 2006. The trust launched in June 2004 and was the most successful by a new entrant into the VCT market, raising 25.1m through an offer for subscription.

Brokers feel full force of M-Day as profits dwindle

Three out of four brokers say M-Day has made their jobs more difficult and profitability is decreasing, according to Alliance & Leicester. One year into mortgage regulation, brokers are still experiencing frustrations and lower profits, even more so than they reported to be the case 100 days after M-Day. Fifty-eight per cent of brokers are […]

Life insurance sector to remain stable for the next 12 months

Robust risk management, prudential regulation and a resilient UK economy will ensure stability in the life insurance industry over the next 12 months, says a Standard & Poor’s report. Eighty-five per cent of ratings in the UK are currently stable, according to the Life Insurance Industry Risk Analysis report, the first of it type carr-ied […]


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