IFAs are calling for the FSA to devise a useable definition of misselling so they can do their job properly, prompting Money Marketing to launch a campaign to help the FSA find a definition.
The ball was set rolling by Essex IFA Emery Associates principal Peter Emery who, in a letter in this week's issue of Money Marketing, says a definition is urgently needed. The campaign already has the backing of Sesame, Momentum, Berkeley Berry Birch and Alan Steel Asset Management.
Advisers say the lack of a definition affects every aspect of their business from their ability to get affordable professional indemnity insurance cover to advising clients without fearing retrospective reviews from future regulators.
They say FSA chief executive-designate John Tiner missed the opportunity to publish an adequate definition in April and say the regulator must act now.
Emery Associates principal Peter Emery says he cannot see how advisers can sell anything confidently without a misselling definition and points out that even though sales may be compliant with present rules and regulation, IFAs could become liable later under new rules and market conditions.
Alan Steel Asset Management consultant Alan Adam agrees that the industry needs a clear, functional definition of misselling but he believes the FSA would rather give a “qualified, legalised” definition that the man on the street cannot understand rather than one that would make life easier for IFAs.
Emery says: “This is a constant thorn in our side and we remain totally exposed to criticism of this nature while we are unable to define what a missale actually is and by definition what a 'proper' sale is.”
Sesame head of compliance Paul Nourse says: “We welcome any greater clarity that will help our members do better business and we support a campaign that would further provide a clearer definition of misselling.”
Berkeley Berry Birch managing director Stephen Ingledew says: “This is not just about the industry, it is also about consumer protection. The sooner we have this definition, the better off we will all be.”
FSA spokeswoman Louise Buckley says: “Our note stressed how important high selling standards are if future claims of misselling are to be avoided. The industry now needs to look at how it can achieve and maintain these standards.”