The FSA says it has no agenda to persuade small firms to join networks or national IFAs, as history shows that many of the advice sector’s problems have been caused by bigger firms.
In an interview with Money Marketing, head of the retail distribution review Amanda Bowe rejects the suggestion that prudential rule changes could see many small firms link up with bigger organisations.
She says: “You will be as aware as I am the biggest failures have been with bigger firms. There no sort of agenda or suggestion that we will not worry about the bigger firms.”
Bowe reveals that the FSA itself, rather than any industry representatives, decided to include the controversial question of whether the link between independence and whole of market should be severed in the industry-led RDR discussion paper.
Bowe says she is still glad the FSA inserted the question as it has focused debate on the client/adviser relationship, despite concern from some that the question has overshadowed other important elements of the review.
Bowe says the FSA is alive to adviser concerns about the potential dangers of the review and no decision has been made about the scale of the changes the RDR will bring in.
She says compatibility with Mifid has to be addressed, as the discussion paper points out, but this will depend on how far the industry moves on its own and how much regulatory intervention is required.
She says: “We have made it clear that the results of this may well be few regulatory changes to the market.”
Bowe says she has been impressed by the quality and numbers of IFAs attending the FSA’s RDR workshops and that most of the 150 RDR responses received so far have been from small firms.
She says her biggest annoyance is advisers saying the RDR is only IFA-focused, stressing that the sales and product bias of tied advisers is being investigated just as closely. She points out that the phrase “IFA” is used only three times in the discussion paper.