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FCA: Advisers have gold-plated independence rules

Small advice firms have created unnecessary problems for themselves by “gold-plating” the regulator’s independence requirements, says FCA technical specialist Rory Percival.

The FCA published its findings of a thematic review into independent advice this week. Following the review, the FCA says its rules on independence are not as onerous as some advisers believe and are “perfectly achievable” for small firms.

In an interview with Money Marketing, Percival says while many believe the rules are difficult to comply with for small firms, advisers and compliance consultants are taking an overly cautious approach.

Pervical says: “We have always said that independence is a perfectly achievable standard, even for smaller firms.

“Why have firms got a different view? Perhaps part of it is some firms are very wary of the regulator’s requirements and gold plate the requirements.

“That may be something that comes from compliance consultants and compliance people who want to take a more cautious line than is actually merited.”

Asked whether the industry has created unnecessary problems for itself, Percival said: “We have certainly seen that in other areas and it is possible it has happened in this area too.”

Problems identified in the review included the use of platforms, referrals to other advisers and advisers not being able to consider all retail investment products.

Plan Money director Peter Chadborn says: “Advisers are being influenced by networks, which are very much erring on the side of caution on these rules, and by the vested interests of compliance consultants.”


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