Industry consultant Peter Williams says he is uncomfortable with how the FSA has defined independence and is concerned about the way the regulator will assess whether firms calling themselves IFAs are meeting the appropriate standard.
The FSA has defined independent advice as a personal recommendation of a retail investment product which is “based on a comprehensive and fair analysis of the relevant market” and is “unbiased and unrestricted”.
Williams is a non-executive director at Alan Easter’s venture Beaufort Group. Speaking at a session on post-RDR independence at the Personal Finance Society annual conference in Birmingham last week, Williams said: “My advice to the board is I am very uncomfortable with the independence tag. Not because we do not want to be an IFA, we are an IFA today and we will be in the future. But the way the FSA has defined it is not as clear as it could be.”
He said in a recent meeting with the FSA, the regulator told him whether a firm is assessed as independent or not will be “down to interpretation”.
Williams said: “That is what scares me. What is interpreted in one way today may be interpreted differently in 18 months time. We will be whole of market but we will probably be classed as restricted whole of market, because we will be restricted but still effectively be offering an IFA proposition.
“I am very uncomfortable with the loose language coming from the FSA.”