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Advisers attack ‘knee-jerk’ changes to approved persons regime

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Advisers have attacked the proposed abolition of the approved persons regime as a “knee-jerk” reaction which could prove expensive at a time when regulatory costs are spiralling.

On Monday, Chancellor George Osborne unveiled plans to replace the “failed” approved persons regime with a senior persons regime and licensing system for all regulated financial services staff.

The parliamentary commission on banking standards recommended the move for the banking sector but the Government says it is simpler to change the entire financial services regime.

The FCA is expected to introduce transitional arrangements with reforms primarily targeted at banks. There are no estimates yet on costs or time frames.

A Treasury spokesman says: “There will be no change in the arrangements for authorising firms and no firm will need to seek re-authorisation as a result of the reforms.”

FCA chair John Griffith-Jones has welcomed the new regime and the FCA says it will produce a detailed response in the autumn.

Lansons Communications director Richard Hobbs says: “This change for advisers is a waste of money. The FCA register will need to be started again so it will take a minimum of two years and everyone will have to foot the bill.”

Association of Mortgage Intermediaries chief executive Robert Sinclair says: “It is an incredibly unhelpful decision and all I can see is extra costs.”

Worldwide Financial Planning IFA Nick McBreen says: “This is a nightmare and ridiculous overkill. Sort out the banks but don’t mess around with the IFA sector when you don’t need to.”

Yellowtail Financial Planning managing director Dennis Hall says: “Firms of my size are punch drunk with all the changes. This is another knee-jerk reaction.”

This month, the FCA confirmed advisers in the A13 fee block are being hit with a 16 per cent hike in regulatory fees for 2013/14 to £38.1m, up from £32.8m in 2012/13.

The FSCS has also announced changes to its funding model, from next April, which would have seen investment advisers hit with a maximum levy of £150m for 2013/14 instead of the £78m actually levied on them under the current model.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Here we go again. Politicians logic at work once more. “Something must to be done…… Oh here is something, therefore we must do it. The regulators love the idea as they will be able to add this to the “to do” list and will crank up regulatory costs further still. You can bet your last penny that whatever they dream up to replace it with will not be any better than what we have got now. Madness, sheer madness

  2. Another dreamed up idea to keep themselves busy and justify their nice, cushy little earners – what next? Cost is no consideration; they won’t be paying it! Perhaps the most disappointing factor is that government seem to be quite happy to go along with any level of incredible stupidity the FSA/FCA propose, though I imagine proper consideration and veto would occur if funding was from the public purse – but then again?

  3. If the government has proposed it they should pay for it.

    I recall it was the banks that were bailed out by us taxpayers not financial advisers and yet we are once again being asked to pick up the tag – look at the increased cost to change one word in a regulators name!

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