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Deauthorising advisers could spark FSA system crash

FSA building 480

An adviser has raised concerns that the FSA’s online systems will not be able to cope with the volume of deauthorisation requests in the lead-up to 31 December, which could impact on firms’ fees next year.

Individuals seeking to cancel their regulatory permissions can only do so seven working days before they wish to stop giving advice, meaning all advisers who plan to stop giving advice on 31 December will have to notify the regulator on 19 December.

Advisers must apply to cancel their permissions through the FSA’s online notification and applications system.

Belmayne Independent Financial Services chartered financial planner David Bashforth is worried the ONA system will not be able to cope with the volume of applications on 19 December.

He says if the system crashes firms may be charged higher FSA fees and levies, which will continue to be assessed according to a firm’s headcount until April, when costs will be calculated based on income.

He says: “We know from experience if there is high demand on a website there is every likelihood there will be problems, which will come at the worst time of year with less staff over Christmas. It just shows the FSA has paid no thought to an issue that is so abundantly obvious. It beggars belief.”

An FSA spokeswoman says: “We are not concerned about potential system crashes and do not anticipate any problems with this.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Of course they are not concerned. They couldnt care less whether the system crashes or not. They will simply say that your request was not received in time and so cough up your fees. Then they will become under pressure to start chasing non payers who eventually end up being struck off because the regulator makes it so difficult to leave in good standing. Let the games commence!!!!

  2. Who cares? Those who try to cancel their regulatory permissions online but find the FSA’s system crashes on them (if it does) need only send in a letter of notification, stop advising and then ride off into the sunset of early retirement, hopefully having obtained a reasonable sale price for their client bank and managed to arrange suitable PII run-off cover (or retired to a foreign country many thousands of miles away beyond the evil hindsight clutches of the regulator).

    It will be interesting to learn just how many advisers do throw in the towel at the end of this year and how closely or otherwise the number accords with the FSA’s estimate of between 8% and 13% of the total, not least in view of the fact that we have no idea how this range was arrived at. If the FSA’s methodology was anything like its estimate of the costs of implementing the RDR (originally £600m but now nudging £2Bn), the actual attrition rate could be anything between 8% and 25%. Still, never mind, you can’t make an omelette without breaking a few eggs and the RDR is the FSA’s biggest omelette yet.

    Thankfully, having at the 12th hour just managed to clear the Level 4 hurdle (Level 5 actually), I shall still be here, alive and kicking.

  3. Well Done Julian,

    Glad to hear you are still going to be around.

    I hope to be hear too if calibrand can finally get my certificates sent to me so that CII will then credit my points.

    Obviously your comments were said tongue in cheek, its really sad to see so many good advisers have to leave the industry.

    It is now a lot worse than a banana republic.

    I was trying to explain to a client why Capita had not had to just compensated her and then sorted out the Arc Cru mess between the other parties later. She kept asking why the FSA had allowed this and where was the evidence??? If i had not been able to show her the past comments and articles on MM and FA i am sure she would have thought I had been at the communion wine and made the whole thing up.

  4. My comments weren’t tongue in cheek, Neil. I’m naturally sorry for all the good intermediaries for whom the industry has become so toxic that they simply don’t wish to carry on. I hope they do manage to get a decent price for their client banks and can start a new and different chapter in their lives.

    That having said, for all the unforseen problems that the RDR looks likely to throw up and the FSA’s obduracy on such matters as commission from legacy products, it will also (we hope) clear out much of the remaining bad apple element of the IFA sector. I have no idea how big that element may be but, like many of my colleagues, I’ve seen my fair share of shoddy workmanship on the part of other IFA’s and the industry will probably be better off without them.

  5. The FSA’s paper Form C is still available in the Handbook under Supervision Forms which suggests it can still be used.

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