The FSA censured Wills & Co for poor sales practices and not monitoring its advisers properly despite a fine and call to action in 2007.
Wills & Co would have been fined £1.5m if it had not been in the process of winding down its business with a large amount of customer redress due.
In an interview with Money Marketing Shakeshaft says the FSA is creating a situation where shares have to be sold in the same way as insurance products, which is putting stockbrokers out of business.
He says: “If it is, as the FSA says, that you need to sell a share like an insurance product then we have nowhere to go. There is no point in any
stockbroking firm trying to do business at any time.”
Shakeshaft says stockbrokers are also suffering from competition from firms on the continent that can sell into the UK without investor protection and have more pragmatic regulators.
He says the firm spent a significant amount of money with a top four consultancy firm to look at its procedures and was told it had not missold.
He says: “The FSA now believes it is bulletproof. They believe that good legal argument is irrelevant as they can bully or railroad any firm into
“We stopped defending our actions because we ran out of money although we still believe we were right. There is no point in any stockbroker fighting the FSA.”
CandidMoney.com founder Justin Modray says: “Today’s smaller companies will be tomorrow’s big players so overregulation is a worry.”