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Is Tory letter first class or a sham?

Are the Conservatives genuinely worried about the potential danger that

the FSA could cause to IFAs when the Financial Services and Markets Bill

becomes law? Or are they simply playing politics in an attempt to score

points against the Government in the months leading up to a general

election?

The IFA community seems split on this matter. Some share the concerns that

the Tories claim to have. Others are sceptical and say it is a game of

political football.

As exclusively reported in Money Marketing last week, the Tories have sent

a letter to every constituency party in the country, urging its members to

get out and inform IFAs about the damage the regulatory authority might

cause to their livelihoods.

Kangley Financial Planning managing director Geoff Kangley, who is a

member of the Aifa council, is doubtful about their motives. He concedes

that the letter raises some legitimate political points but he does not

believe the bill is as damaging as they make out.

“I cannot help thinking that if it was the other way around and if all

IFAs were writing to every MP, how upset they would be. It is obvious they

are trying to score points over the Government,” says Kangley.

Carrington Investment Consultants adviser Edward Nice is eager for the

FSA to get up and runn- ing and sees any attempt by the Opposition to hold

it back as being a detrimental move.

He says: “If the FSA promotes good practice, I would like to see it

encouraged.”

But IFA Roger Sanders thinks there is some merit in the arguments being

put forward by the Conservatives. Sanders is joint chairman of the FSA

small business practitioners panel and joint deputy chairman of Aifa.

Sanders says: “There are still some issues that I think anyone who is

looking for accountability in the regulator might be concerned with. The

real problem is that the Government is pushing this thing relatively

quickly.”

The Tories&#39 letter uses strong language to describe the threat the bill

could pose to the IFA segment of the market. It was drafted by Tory

frontbenchers Howard Flight, who is also joint chairman of Investec

Guinness Flight, and Andrew Tyrie.

Both MPs are very well versed in financial matters and have been leading

the party&#39s fight against the bill. It is the latest move by the party in a

long fight against the bill. The bill is the legislation which will give

the FSA its regulatory powers. It is at the report stage in the House of

Lords, one of the last stops in the process before it receives Royal

Assent.

There is one more day of report, which is the last opportunity the Lords

will have to debate it. As yet unscheduled, it will occur at some time

after the Easter recess. Several lords have tabled further amendments to

the bill and hope these will be debated on that day.

It is fairly commonly accepted that any amendments at this late stage that

do not have the approval of the Government or crossbenchers are doomed.

This is one of the reasons why the Tories have come under fire for this

tactic.

Informed Choice managing director Nick Bamford says he does not personally

feel threatened by the prospects the FSA presents to his IFA firm. Having

followed the debate on the bill from its inception, Bamford does not see

any new arguments being made in the letter.

He says: “It is interesting that the Conservative Party is trying to seek

support from the IFA market despite the fact that when they were in power

they had no desire to listen to our interests whatsoever.”

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