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FSA offers fact-find and hikes fees for Equitable

IFAs have hit out at FSA plans to set up a DIY fact-find for inv-estors, claiming it goes against the regulator&#39s statutory objective of protecting consumers and will only result in more confusion.

The fact-find, part of the FSA plan and budget 2002/03, has come under fire from IFAs as another step towards the FSA offering advice but the regulator has again insisted it is only offering generic advice.

The FSA also plans to exp-and its league tables to with-profits policies, where a measure of firms&#39 financial strength will be included.

According to the FSA&#39s budget, life offices will be charged an extra 10 per cent in fees in the coming financial year because of costs incurred by Equitable Life.

The FSA has outstanding costs of £2.8m because of the Baird report into its handling of Equitable and expects to face costs from the Penrose and Parliamentary Ombudsmen inquiries into Equitable.

The regulator has proposed radical changes to the way it supervises the life industry which will lead to higher costs.

The budget says costs due to supervision have gone up to £79m from £72.5m since last year and the main reason for this is the “increase in resource devoted to insurance regulation”.

IFA Baronworth Investment Management director Colin Jackson says: “The FSA have been banging on about consumer protection. Now they are saying we will send you the fact-find, figure it out for yourself. It is completely contradictory. If you are sick, you do not diagnose yourself.”

FSA spokeswoman Kate Bristowe says: “It is never wise to condemn something you have not seen. Our proposed interactive tool will not replace specific investment advice tailored to an individual&#39s particular situation.”

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