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FSA ‘horrified’ by platform switch claims

Rory Percival FSA

The FSA says it is “horrified” that advisers may be switching wraps unnecessarily to prove they are using more than one platform.

Speaking at The Platforum annual conference in London last week, Ascentric managing director Hugo Thorman said an unintended consequence of the FSA’s guidance, which states that it is unlikely one platform can meet all clients’ needs, will see advisers look to move some clients to another platform simply to satisfy the regulator.

Thorman says: “We have had transfers unfortunately that were not always for the right reason. That is one of unintended consequences of the instruction and guidance given by the regulator.

“We have had advisers saying ‘we are going to have to scale back and move half of the clients across to another platform’, not necessarily because they are more suitable but because that is the only way they can demonstrate to the regulator they are not using one platform.”

But FSA technical specialist Rory Percival urged advisers to ensure they are appeasing their client rather than simply looking to satisfy the regulator.

Percival said: “An adviser moving business to another platform because that is what they think the regulator expects is something I find horrifying and annoying. There is no secret checklist the FSA demands from advisers over platform use, it is about making sure your client is looked after and if that is done then the FSA is happy.”

Percival added that parts of the industry seem to have misunderstood the FSA’s guidance in this area.

He said: “The notion that the FSA says advisers need to use two or more platforms is a fallacy. It is all about what is suitable for each client.”


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There are 12 comments at the moment, we would love to hear your opinion too.

  1. What do they Bl**dy expect …… I just wish someone would get them and the treasury and a few people who actually work in the industry together in a room and show what a bunch of idiots they really are – They have failed miserably on all levels – consumer protection – (too little too damn late ie PPi – UCIS etc etc etc) regulation – (Banks) – and RDR – (lets remove the advisers from the market altogether and stop normal people who are not millionaires from getting advice) when will the powers that be ever ever get it right!!!!!!!

  2. Better to maintain your silence and people may wonder if you are an idiot, than to open your mouth and remove all doubt.

    Well done everyone at the FSA all doubt is removed.

  3. To be fair, Rory Percival does seem to have a grasp of the issues, and be willing to to use his brain, witness a number of recent common sense observations.

    However, it does put a big question mark against the competence of those who made the previous comments and issued these so called ‘guidelines’.

  4. FSA to adviser “Do you use more than one platform?
    Adviser “no”
    FSA “then you cannot possibly be meeting all your client’s needs”
    Adviser “sorry, I will start using more than one”
    FSA “Now I am Horrified and annoyed”
    Adviser “ever heard of catch 22?

  5. Let’s face it Hugo, nobody can EVER satisfy this regulator. Whatever we do, is simply not enough.

    Saw an old Dracula black and white movie the other evening, starring Bela Lugosi. Had to switch it over; reminded me of the FSA.

    Problem was, Hannibal was the alternative. There’s no escape, they just want more blood.

  6. Competance? Excuse me?

  7. FSA horrified by IFA’s
    IFA’s horrified by FSA
    Lots of mutual trust here then

  8. I’ve got to stop reading these articles, it’s just not good for my blood pressure!! If you wanted the perfect blueprint to completely f/m~~k up an entire industry and the personal finances of the majority of the population; these guys have found it. Sants and all the others who deserted the sinking ship must feel as proud as that idiot Brown who single handedly ruined the finest pensions system in the world!! It would be funny if it was not so bloody sad.

  9. Unusually for an FSA representative Rory actually went to an industry event and fielded questions and answers.His comments as reported are perfectly sensible even if the organisation he works for is not.

  10. The misunderstanding of FSA guidelines usually occurs when it reaches compliance personnel. I have experienced the overkill of many compliance units in my 20 years and have resisted their stupidity on many occassions i.e. you must advise MPPI in every instance, yeah right. I am not one to defend the FSA especislly regarding the RDR but direct contact with correct dept means there is clarity and they are, in the vast majority of instances very helpful unlike compliance units.

  11. ” it is about making sure your client is looked after and if that is done then the FSA is happy.”

    Our clients are completely looked after and completely happy. So why is my whole business model having to change and costs keep rising. Clearly the FSA and client interests have little in common.

  12. Rory Percival does seem to be the only prominent figure at the FSA who knows what a client (or an adviser) looks like. However, it is his cohort which has imposed these stupid and pointless rules, mainly by threat. As a consequence my happy and content clients are advised with my fear of Regulatory Retribution at the forefront, not their individual interests. For instance, we have used model portfolios in the past and now clients are being switched into multi asset funds as we cannot keep up with the regulatory pressure (unless the client is willing to pay a lot more which is hard to justify). The trouble is these funds, for all their wizz bangs and science, on a volatility based like for like scenario cost more and do not perform as well as our old portfolios. It is now the process that has to be correct the REAL ‘consumer outcome’ can be rubbish, as long as it was a good, repeatable, documented to the ends of the earth process that got them there. What a shame… (Oh, and posted anonymously for fear of being shot by MW).

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