Aifa has urged the Government to consider merging the Financial Ombudsman Service and the Financial Services Compensation Scheme into the FSA when it becomes part of the Bank of England.
Chancellor George Osborne has announced plans to scrap the FSA and replace it with a new prudential authority in 2012 which will be a subsidiary of the Bank of England, monitoring banks, insurers and other financial institutions. A new Consumer Protection and Markets Agency will regulate all authorised firms.
Aifa director general Chris Cummings says: “A way to bring down the regulatory costs would be to roll the ombudsman into the FSA. The FSA is consulting on a fairer compensation scheme and we have to look at how we could roll that in as well. Why do we have three organisations? Would one be more efficient?”
Cummings is calling on the Government to ensure the future regulator recognises different firms pose different levels of risk and to levy firms accordingly.
He adds: “What we also need is a level playing field between advice given out through IFA firms, advice firms, banks and product providers.
“We need commonality of approach, which does not mean to say they must all be regulated by the same body but there must be common principles agreed between the two.”
Cummings says the creation of a CPMA may not increase the overall regulatory cost for IFAs, who he says currently shoulder too much of the cost burden of the FSA.