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FSA gap still wide open

New FSA authorisations of IFA firms fell by nearly 10 per cent to 74 in the second quarter of this year from 81 in Q1.

The Maximas quarterly review of FSA authorisations and cancellations reveals authorisations of mortgage broker firms have remained stable at 23.

Advisers and brokers have shown “consistently high auth- orisations” over Q1 and Q2 and collectively represent over one-third of authorisations for the second quarter.

Authorisations for the corp- orate finance, fund management, hedge fund, wealth management and private equity sectors rose by 17 per cent from 65 in Q1 to 76 in the last quarter. Cancell- ations halved from 33 to 16.

Overall, the second quarter saw the first increase in author- isations since Q1 2008 to 282, up from 257 in Q1 this year.

Maximas says overall cancellations reached 631 in the last quarter compared with 773 in Q1 but these statistics were not broken down by sector.

The report says: “Further improvements in the health of the UK-regulated financial services sector is required before the gap between FSA authorisations and cancellations closes.”

Pension Transfer Solutions managing director Carl Melvin says: “The retail distribution review and the economic climate are driving consolidation in the sector, so many IFAs that were previously directly authorised may look to join networks or merge. I expect the trend in cancellations to accelerate in the run-up to the RDR.”

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