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FSA set to recruit providers as watchdogs

Advisers have been warned to expect providers to check on the quality of advice given.

Unity Homeloans compliance director Mike Davies says he expects the FSA to confirm later this month that lenders and insurers will be given responsibility to police their distributors’ advice across the financial services spectrum.

At Financial Services Scotland, Davies said: “In the next few weeks, the FSA will give responsibility to providers for checking whether a product sold by an adviser is appropriate.

“The discussion paper will make lenders 100 per cent responsible. That will take us back to where we were a few years ago but the FSA has not fully taken on board the practical implications. Advisers may have the provider on the phone checking consumers are getting what they expected to get.

“The industry could get smaller as enforcement action increases as those that are not doing things correctly exit the market. But it could be a field day for those that get it right.”

Complete Mortgages & Loan Services compliance director Bill Warren said: “Advisers should prepare by virtue of doing what they should be doing every day, which is making sure they give good advice.”

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