An FSA admin blunder is creating confusion for hundreds of firms over what risk rating they will receive once the new regulatory regime begins in December.
Letters sent to IFA firms in July told them which of four categories of risk they will fall into. But problems began when some firms rec-eived a second letter putting them in a different category.
Hargreaves Lansdown says it received three letters over two weeks. The first said the firm would be regulated by the relationship management department, which includes the three higherrisk categories.
A second letter downgraded the firm to the regulatory events department which will regulate the lowest-risk firms. Finally, the third letter placed it back into relationship management.
The firm contacted the FSA and was told there had been hundreds of similar mistakes due to an admin error.
Other IFA firms say they have had similar problems but are unwilling to give their names for fear of upsetting the regulator.
Hargreaves Lansdown compliance officer Nigel Bence says: “A mistake of this nature does not affect our confidence in the regulator. It is just an indication of the extent of the work they are trying to do and the timescale they are trying to do it in.”
But another IFA says: “They expect infallibility from us. It is a shame they do not hold themselves to the same high standard.”
FSA spokeswoman Jackie Blyth says: “There have been very few problems. There has been the odd glitch, which is understandable when you are dealing with 8,500 firms.”