Director general Chris Cummings said the major fault with the current regime is that it allows people to “pretend to be something they are not”.
He said: “We need to scrap the current disclosure regime, completely throw it away. The truth is not what you say, it is what the person hears and at the moment we have a regime that props up what people hear rather than encourages what people say.”
Cummings said it is imperative the FSA helps enable consumers to understand whether someone acting on their behalf or for a provider. He said: “We need a clear demarcation. The model that should have been broken is the one that allows you to pretend to be something you are not. The history of financial services is littered with organisations that overpromised and underdelivered and were not around when they were needed most and yet it is the IFA community that suffers the consequences.”