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IFAs facing action after mystery shop

The FSA is already taking action against rogue IFAs uncovered in its latest mystery-shopping exercise, says leader of the retail intermediaries sector Stephen Bland.

The study, which visited a wide range of IFAs, found that almost all firms claimed to offer full advice but only a third undertook a full review of customers’ needs and objectives.

The FSA has revealed plans to take robust action from next March against firms which fail to embed its treating customers fairly principles in their business. However, Bland says it is already taking enforcement action against firms which breach its principles, as well as its prescriptive rules.

He says: “We will be absolutely strict. We are already taking action against firms with major failings identified in the report. We are confident in our findings. In other reports on the financial advice sector, the phrase disappointing has come up a lot.

“Breaching the spirit of the law can be even worse than breaching the letter of the law. It is all about intent.”

The FSA will phone 10 per cent of IFA firms over the next few weeks to talk through the results of the survey. It will also run a series of courses on TCF this autumn, costing £150 a head.

Bland rejects recent accusations from the practitioner panel that its mystery shopping and thematic exercises are statistically useless because they use small sample sizes. He argues that covering more firms would be too expensive.

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