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FSA delays discussion on provider police role

The FSA has postponed its discussion paper into the relationship between product providers and advisers amid continuing concerns that the regulator is trying to force providers to police intermediaries.

The threat of extra responsibilities has forced non-mortgage trade bodies to start thinking about the potential impact of any FSA action.

The ABI and Aifa will release a joint paper in September to coincide with the FSA’s belated announcement that month on the provider/broker relationship, which will specifically look at pensions, protection and investment business.

The Council of Mortgage Lenders is waiting to see the results of the FSA response and joint ABI/Aifa document before deciding whether to formulate its own piece, although it is asking its members to recommend drafting a paper.

The FSA told the Council of Mortgage Lenders last month it does not intend to alter the responsibilities of producer and distributor firms.

Aifa director general Chris Cummings has warned that the independent mortgage broker market could be seriously affected if lenders have to police brokers because of the cost to provider. He says: “It is not for the FSA to determine the provider/broker relationship.”

Accord Mortgages managing director Linda Will says: “Hopefully, the delay from the FSA means they are trying to address the problem as we need absolute clarity.”

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