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FCA urges advisers to plan for wind-down

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The FCA is consulting on guidance for firms closing down their business after advisers requested clearer information from the regulator.

In a 28-page consultation document aimed at solo-regulated firms, the FCA says firms should have a wind-down plan regardless of how they are performing.

The regulator adds the approach it sets out is not mandatory for firms to follow.

It says: “It is not a prescribed approach and firms can depart from it as they choose or use completely different approaches. The approach document does not by itself impose any obligations on firms to create wind-down plans. The intention of this approach document is to make some helpful suggestions in order to assist firms’ thinking in this context.”

The FCA says there are two main areas firms overlook when closing their business: a communications plan and, if the firm is part of a wider group, if group resources would be available as the business shuts down.

The consultation paper adds: “We believe that an effective wind-down plan should help a failing firm to cease its regulated activities and achieve cancellation of permission with minimal adverse impact on its clients, counterparties and the wider markets. So the approach document aims to help a firm factor these considerations into its wind-down planning.”

The consultation closes on 22 July.



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There are 8 comments at the moment, we would love to hear your opinion too.

  1. Is this a wind up?

  2. A pity they never pointed out to all the sole traders and partners that it makes no difference whetehr they wind down or up smoothly, the FOS will still ignore the 15 year longstop however long ago they left the industry and whether they are in a nursing home or even DEAD or not and still consider spurious and vexatious complaints which if you have followed then PIA or FSA guidelines as well as the DPA will mean the the file to consider and perhaps DEFEND the spurious case has been long ago deleted.

  3. Julian Stevens 24th May 2016 at 12:34 pm

    ‘Cos we, with the help of the FOS and the FSCS, intend to make life so damned difficult that pretty soon you’ll want to.

  4. I am not sure that consideration to those affected will be uppermost in the minds of owners whose businesses are failing.

  5. David Quarrell 24th May 2016 at 3:20 pm

    We have been playing- its called RDR !

  6. I’m sure a fair few advisers would also suggest a wind down plan for the FCA. In the meanwhile, here are my tips for a successful wind down for small businesses and sole traders.
    1. Ensure everything of ant value is in the wife’s name as early as possible. (But please stay happily married).
    2. Learn Portuguese or Hebrew as both Brazil and Israel have no extradition.

  7. About planning for this structured exit! I think this is a completely wasted exercise in self justification by providing a 28 page consultation paper on the subject. I say this as I value my business at nil irrespective of the funds under management, the clients have the freedom to vote with their feet and seek alternative investment advice whether I’m here or not. The new firm can obtain the individuals plan/policy details from the provider with a simple letter of authority or transfer of agency with servicing rights. Which incidentally has been a major business boost factor over the previous 28 years for us.

    Since RDR I have whittled the client files down and cast adrift numerous individuals because of the level of compliance, cost, reluctance to pay fees and our reluctance to deal with the pointless levels of beuracry in generating business (one area as an example is mortgage business, back then we did 20-30 mortgages a month now it’s 1 or 2 on an accomadation basis only) I would add that this decision was not solely down to the FSA/FCA directly but also the lenders interpretation of the FSA/FCA criteria!!!!.

    So I f I bail I know there’s multiple firms waiting by the phone ready to send out the TOA letters if contacted by the clients & then they can also make a decision to say thanks but no thanks.

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