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Panel fears RDR will hit small firms

The Smaller Businesses Practitioner Panel has warned that the retail distribution review may force some small firms out of business and push up regulatory fees.

In its annual report for 2007/08, published last week, the panel warns that many small firms view the RDR with “apprehension and uncertainty”, which has a destabilising effect.

The panel calls for the FSA to offer better support for smaller firms on principle-based regulation. It says: “One of the biggest challenges facing smaller firms is that they operate in highly competitive marketplaces with tight margins. The available time to absorb what is perceived to be a complex regulatory approach is very limited.

“Many smaller firms, without internal compliance departments, have no option but to incur high consultancy costs. Even then, firms may still not have certainty that they are compliant until their businesses are reviewed by the FSA.”

The panel voices concerns over the mortgage intermediary market, saying the FSA must take “swift supervisory and enforcement action to improve standards”.

Panel chairman Mark Rothery says: “Many smaller firms still feel overwhelmed by the demands and uncertainties over the FSA’s move to a prin-ciple-based approach, the application of the TCF initiative and the potential impact of the RDR.

Paladin Financial Services managing director Tim Purdon says he would like to see more guidance for small firms.

He says: “It is often difficult to identify which information is relevant to us. The problem with TCF and principle-based regulation is it is open to inter-pretation and we are receiving information from different sources that make it seem more onerous than it actually is. I think the FSA needs to clarify that information.”


Niche little earner for Fitzwilliam fund

BDO Stoy Hayward Asset Management believes its macro approach to asset allocation and focus on niche markets has helped the Fitzwilliam growth fund of hedge funds achieve top spot in a report aimed at pension funds.

Nationwide set for shared equity

Nationwide has confirmed it will offer a My Choice HomeBuy shared equity product from June 10. This is the Government’s shared equity scheme launched on April 1 to replace the Open Market HomeBuy scheme.

Regulator facing legal battle on RDR

Cazalet Consulting principal Ned Cazalet believes that the FSA will face tough regulatory and legal barriers if it tries to carry through its planned differentiation between sales and advice.


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