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IFAP and FSA clash over monitoring

The FSA is letting consumers down by failing to monitor the status of financial advisers under depolarisation, says IFA Promotion chief executive David Elms.

Elms says the FSA’s refusal to document the scope of advisers’ businesses means the FSA is unable to provide consumers with vital information on whether an adviser is independent, whole of market, single-tied or multi- tied under the new depolarisation definitions.

He says that calls to the watchdog from consumers confused about the status of an adviser they may be dealing with are often referred to IFAP which continually audits its members to make sure they are independent.

FSA spokeswoman Sam Bennett rejects Elms’ criticism and says advisers should be making the nature of their proposition perfectly clear to consumers in their key facts and initial disclosure documents.

Bennett says: “We do keep records of firms and indiv- iduals, including any infor- mation we need for regula- tion, but we are not recording the scope of their business. There is nothing in our rules that say advisers have to say what they are.

“There is no reason that consumers should be confused as advisers should be comp- letely clear about the status of their proposition.”

But Elms says: “The FSA should be able to provide consumers with this information. Given that they introd-uced depolarisation and crea-ted these different strands of adviser, it would be sensible for them to monitor the status of advisers.”

Plan Invest Group joint managing director Michael Owen says: “It is common sense that since the FSA brought depolarisation in, they should have this information to hand and be assessing the impact of their rules more closely.

“If IFAs are happy to tell the public what they doing, they are happy to tell the FSA. We have no skeletons in the cupboard.”

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