Aifa has accused the ABI of pursuing a “very clear agenda that is anti-advice, anti-adviser and working against the consumer”.
Director general Chris Cummings says the primary advice proposals- lobbied for hard by the likes of the British Bankers’ Association and the ABI- go against the consumer’s interests by trying to lock them into long term products when it may be in their interests to move around as situations change or more innovative products are launched.
Cummings also warns the FSA that powers outside of the regulator’s control could end up scuppering many of its RDR goals.
For example, he says the FSA could have huge problems harmonising the RDR conclusions with Mifid and forecasts some interesting battles ahead if the regulator tries to gain exceptions to the directive as part of the RDR.
These outside forces are something the FSA is quick to acknowledge in its RDR discussion paper.
It suggests that Mifid may have the “greatest potential impact on implementing proposals” by limiting the ability to introduce new detailed rules for firms that conduct Mifid business.
It also points out domestic legal considerations that the FSA has already considered and will have to bear in mind as part of the review. These include competition law, general law, the Human Rights Act and tax law.
Aifa has also launched a future of advice taskforce, including many of the advice industry’s big names, charge with producing a “manifesto for advice” to be launched later this year.
The FSA has published its findings from its thematic work investigating firms with provider clawback debts which has led to 11 firms taking remedial action. The regulator says it will continue to monitor such data as a way of quickly identifying problem firms.
The regulator also published further support for adviser firms on improving levels of TCF across their businesses ahead of the two deadlines of March 2008 for firms to show they have appropriate management information or measures in place to test TCF and December 2008 to demonstrate they are consistently treating their customers fairly.
The FSA also tidied up the remaining issues surrounding the disclosure requirements to be introduced with the new conduct of business sourcebook on November 1.
The FSA has published details of the less prescriptive suitability report that will be needed and confirmed that requirements about advisers defining themselves as independent and providing a simplified prospectus or key facts document have been retained.
It also states that although the menu and IDD are to be retained as guidance rather than rules after November, advisers will only be allowed to use the keyfacts logo if they retain the menu and IDD the way they appear in the handbook.