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PFS says reward progressive firms with lower fees

The Personal Finance Society has again urged the FSA to reward progressive firms with regulatory dividends, saying it has done nothing “of substance” on the issue.

Speaking at the Chartered Insurance Institute RDR conference last week, PFS chief executive Fay Goddard argued that firms which put more time and resources into compliance and professional development should be rewarded with lower regulatory fees.

She said: “The FSA has talked a lot about regulatory dividends and I am yet to see anything of substance to come out. It is about time that firms who have genuinely invested in professional development in training, compliance, product planning and in their back-office systems get some kind of regulatory dividend. Why should these firms pay the same fees and be subject to the same costs of regulation as others that do nothing?”

Goddard also revealed that the professional body is working on guidance with the Association of Independent Financial Advisers and other bodies to help advisers determine whether the advice they give is independent or restricted and assist them with disclosure.

She expressed concern that the requirement on advisers to explain to clients how advice is restricted will add to consumer confusion.

Goddard said: “We have been very aware of this issue for a while and have been talking to Aifa and to other bodies on this. As a result, we are intending to produce some guidance on independent and restricted advice by liaising with these other bodies. We need an industry agreed position on this, together with some sort of oversight by the FSA.”

Goddard added that the CII intends to launch its QCF level four alternative assessment in March rather than Q4 this year, as originally planned.


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There are 3 comments at the moment, we would love to hear your opinion too.

  1. I proposed exactly this over two years ago. But, in light of the FSA’s typically arrogant and obdurate rejection of AIFA’s representations to the effect that the share of the FSA’s total regulatory bill imposed on the IFA sector should be aligned with its turnover and degree of regulatory risk, there’s little prospect of any change of stance on this issue. You’re wasting your breath, Ms. Goddard.

  2. I agree 100% with this idea.

    It is interesting that PI insurers do not see qualified people as a lower risk and reduce their premiums too? Could a PI insurer explain why? Maybe worth MoneyMarketing asking the question?

    However re the RDR and raising ALL standards structured CPD NOT qualifications is the way forward and as such is the reason the medical profession opted for this.

  3. I agree with Ron. PI insurers assess the risk and a low PII premium is the reward. (anyone asked the PII insurers what claims have been like based on adviser quals).
    To Faye, how can there be a regulatory dividend for qualifications if we are all to move to level 4 or above? Should level 6 be cheaper, surely that should be reflected in PII and not FSA fees as the supervision for more complicated issues (I assume that is why some what level 6) would require more qualified FSA staff?
    FSA fees should reflect the costs of regulating the sector and then the firm and adviser. As Julian says it does not at present with the burden placed on IFAs who have to carry capital adequacy and PII compared t banks who had no capital until they were bailed out and nor did they have to have mandatory PII as their insurance and investment arms were invariably backed by their banks instead of PII, hence any claims against a bank’s sales force are QED coming from everyone in the UK.
    We are not competing on a level playing field with the banks anymore as they should NOT even be on the pitch……. And that is no disrespect to the actual advisers at banks as some of them are very good…..

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