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Income threat as the FSA seeks references

IFAs claim the FSA is threatening their income streams by requiring references from their networks or firms at the start of the procedure to bec-ome directly authorised.

It says IFAs are often stopped from trading when their network or firm receives the request so the change could hit their income badly as they may not able to do any business for months while the application is being processed by the FSA.

The Bankhall support group says the FSA is now insisting on references from an IFA&#39s current network or firm at the start of the application process before it goes before the approval committee.

Previously, the PIA would process the application as far as possible before asking for a reference with the IFA&#39s approval. This meant that the existing employer or network did not know the IFA was planning to leave until shortly before they received authorisation.

Bankhall director Tony Murrell says: “This has been brought to my attention by an IFA applying for direct regulation and wanting to leave a network. This situation could lead to severe capital adequacy problems for IFAs.”

Whitechurch Network managing director Ian McIver says: “If this is the situation, it affects IFAs wanting to use our support services and needs to be reviewed.”

FSA spokeswoman Louise Buckley says: “To my knowledge, there is not a rule about how we process applications and there is nothing in our rulebook.

“The process may differ depending on circumstances like the information we have and how it is best for us to review the application.”

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