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IFP says FSA has damaged consumer trust in financial services

The Institute of Financial Planning has taken a stab at the FSA, saying its continuous regulatory changes and criticisms of financial services have damaged consumer trust.

In its response to the FSA’s consultation paper on delivering the RDR, the IFP says consumer trust has suffered from many factors outside the control of financial planners and advisers, such as the performance of the FTSE 100 and bank failures.

It adds: “The objective of improving consumer confidence is not helped by continual regulatory changes in retail financial services, and by the FSA regularly telling consumers that those involved in financial services cannot be trusted.”

The IFP also called for a “genuine partnership” between the FSA and professional bodies, to effectively supervise advisers alongside the regulator’s proposals for an internal professional standards board.

In December the FSA announced proposals to give professional bodies responsibility for ensuring that members meet technical competence standards and to significantly reduce the compliance burden for firms whose advisers are members of professional bodies.

The IFP says: “It is important that professional bodies are able to represent the best interests of the consumer and to support the professional requirements of members.

“It is crucial therefore that the IFP is not subject to undue influence from the FSA in any way that impinges on this role.”

IFP chief executive Nick Cann (pictured) says he is concerned about achieving a level playing field, as European law prevents the FSA making membership of a professional body compulsory.

He says: “It is important that those that have joined see some genuine benefit. It is equally important that those who decide, for whatever reason, not to join a professional body do not receive an easy ride.”

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