Speaking at the PFS conference in Birmingham today, director of small firms Stephen Bland said the FSA is increasing small firm supervision which he says will lead to a “shake out” in the industry as it moves towards higher standards.
He says this extra supervision is likely to result in an increase in adviser fees to cover the costs of this extra work.
But he said in the longer term advisers, particularly small firms, will benefit through the changes in the retail distribution review which he believes will lead to lower Financial Ombudsman Service and Financial Services Compensation Scheme costs for advisers.
Addressing fears that the RDR will squeeze out small firms Bland said he expected a healthy and thriving small firms community as a result of the changes.
Bland said: “We want to get rid of the rogues in the market and provide help for the vast majority of firms wanting to do the right thing. There will be a bit of a shake out as we move towards higher standards in the IFA industry. There will be a short term rise in direct FSA costs but overall the package should go down and I have every confidence there will be a healthy community going forward.”