The FSA is mystery-shopping IFAs to vet the quality of advice they are giving to Equitable Life policyholders.
It says it will consider action against firms not meeting their “regulatory obligations”. The exercise is expected to focus on firms which have heavily marketed to Equitable clients.
But the move, outlined in the FSA's submission to last week's Treasury select committee inquiry, has provoked concern from IFAs who say it is not looking at direct and execution-only operations where the real problems lie.
FSA spokesman Vernon Everitt says: “The PIA is examining approaches being made by other firms to Equitable policyholders and the advice they are receiving. This work includes the commissioning of a mystery-shopping exercise involving Equitable policyholders seeking advice on what they should do.”
Wentworth Rose managing director Philip Rose says: “There is good reason to control the vulture activities. They should make sure proper standards of advice are being offered.
“But the PIA is not including direct offers or execution-only business and that is where the major vulture activity is going on. They are only coming down hard on the advisory side.”