IFAs will only have to get identification of current clients and not revisit their entire book as had been feared when the money-laundering regulations are extended this autumn.
A compliance officer with a big national IFA says he has been assured by the FSA that it does not plan to force advisers to go through their whole client bank to ensure they have adequate identification on file.
IFAs had feared that a more radical extension of the money-laundering obligations would be proposed in a consultation paper from the FSA due this autumn.
The news comes as IFAs are trying to come to terms with demands for client ID from providers from September 1.
IFAs are facing a nightmare of trying to contend with different requirements and forms from various providers.
Clerical Medical wants to know a client's nationality while Axa, Friends Provident and Norwich Union each have their own interpretations of what is required for corporate business. NU says it will not allow IFAs to avoid doing money-laundering checks on one-off business worth less than £9,700, which is allowed by EU regulations.
FSA spokesman Patrick Humphris says: “We are trying to replicate this risk-based approach so we do not have unfair requirements on IFAs.”
Momentum Financial Services compliance manager Steve Davie says: “It is a nightmare trying to figure out what all the companies need before they will do business with us.”