The Association of Independent Financial Advisers is warning that an “overly robust regulator” could stifle an economic recovery.
Responding to the Turner review, Aifa director general Chris Cummings cautions against rushed implementation of stringent regulation.
He says: “In a global profession, we should not underestimate the impact and consequences of altering capital and regulatory requirements for the banking sector.
“Aifa believes there could be the risk of an overly robust regulator stifling an economic recovery and creativity in the financial markets.
“We should be particularly mindful of introducing reforms in this country without agreement and consensus at both a European and global level. Without this, the financial services industry in the UK could be placed at a real competitive disadvantage.”
Cummings says the FSA should take care to ensure regulatory changes do not adversely affect other sections of the industry. He says: “We will study these proposals in detail to ensure they provide the best outcome for the IFA profession, the wider industry and, most important, consumers.”
Highclere Financial Services partner Alan Lakey says there is a danger that IFAs will be subject to regulation designed for banks that does not fit the advice sector.
He says: “In trying to shore up the banking system, there is a risk that the proposals will spill over to the intermediary market, which is completely different. People are starting to realise that we need a regulator for the banks and a regulator for intermediaries.”
Technology & Technical founder Kim North says the FSA must conduct a cost-benefit analysis of changes both in the review and the more general shift from principle-based regulation to outcome-focused regulation. She says: “This is going to be very expensive to put in place. Any change in regulation has a cost implication and the FSA has to know what that is going to be.”