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FSA in phone probe on IFAs&#39 Isa transfer deals

The FSA is conducting telephone surveys of smaller IFA firms which carry out Pep/Isa transfer business over fears of possible chur-ning, according to regulatory specialist Compliance Consultants.

The company, which specialises in informing its subscribers of potential regulatory headaches, says the move indicates the FSA believes there is churning going on and could be the precursor to a bigger review.

As part of its new desk-based monitoring of regulated firms it has acquired since N2 last December 1, the FSA is calling IFAs to query their practices when it comes to providing advice on Pep/Isa transfers.

Compliance Consultants says smaller IFAs are now being targeted and follows the interest that the FSA took in bigger firms producing Isa guides last year.

Aifa director general Paul Smee says if the regulator is looking into transfer business it is because they have had complaints from consumers. But he believes that it does not necessarily mean “someone is going to be shot” as a result although he indicates that the move is part of the new risk-based attitude towards regulation.

Compliance Consultants chairman Mark Egerton says: “I think the FSA is taking the view this business is almost being done without any regard for the individual client&#39s personal circumstances.

“The big issue that the FSA may be looking into is the possible trend of IFAs making decisions on Pep/Isa transfers on the basis of past performance alone.”

LIA director of public affairs John Ellis says: “I have not heard complaints about Pep/Isa business.I would be surprised if they found any evidence of any widespread churning.

“I think that people are being very careful, they are even afraid of their own shadows.”

An FSA spokeswoman says she is not aware of any investigation into Pep/Isa transfer business.


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AEGON ASSET MANAGEMENT OPTIMUM INCOME FUND Type: Oeic Aim: Income or growth by investing in high yield and investment grade corporate bonds Minimum investment: Lump sum £500, monthly £50 Investment split: High yield corporate bonds 50%, investment grade corporate bonds 50% Yield: 8.5% gross a year Isa link: Yes Pep transfers: Yes Charges: Initial 4.5%, […]

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