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FSA says no to grace periods for ARs

The FSA has ruled out authorisation grace periods for appointed representatives but has opened the door for IFA firms to sign up advisers left in the lurch if rival networks collapse.

The regulator say it will meet with network bosses and develop contingency plans so that if a rival firm collapses, the firm’s ARs can be signed up with a minimum of disruption to business.

But the FSA has ruled out allowing ARs, whose authorisation depended on a collapsed network, a grace period whereby advisers can keep writing business while they seek another network or direct authorisation.

The regulator says having grace periods would mean that consumers would not have the back-up of the Financial Services Compensation Sch-eme or the Financial Ombuds-man Service.

Retail firms division manager Samantha Tymms says that issues such as financial capability needed to be worked out before a network could take on new appointed reps.

Tymms says the FSA is not against the principal of a rival network signing up advisers from a failed network en masse but the regulator has a role to play in ensuring that advisers can make an informed decision about the firm they are signing up with.

She says: “What advisers need to make sure is that they are getting all the information that they need from a network so that they can make a decision about their future. An appointed rep should go through their contract very closely.”

“We would welcome discussion with any networks. This is something that we can help facilitate.”

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