FSA chief executive Hector Sants has agreed to reconsider introducing a 15-year long-stop if the Treasury select committee recommends the regulator to review its position.
Giving evidence to the TSC on the RDR last week, Sants said: “I have to say I have some sympathy with the argument that says if people are still concerned and if this committee recommends us to look at it again, that is something we could do. Other industries have a long stop, so why not this one?
“Small firms do feel concerned and aggrieved about it in some cases. It was last looked at in 2007 and there was not compelling evidence presented for bringing in a long stop.”
Sants was responding to a question from Treasury select committee chairman Andrew Tyrie who said the committee had received correspondence complaining about the absence of a long stop.
Aifa called for the introduction of a 15-year long stop in its written submission to the TSC’s retail distribution review consultation, citing research it carried out with You-Gov which found that 75 per cent of consumers are in favour of a time limit for the legal responsibility of advisers.
Aifa director of policy Andrew Strange says: “The introduction of a long stop for advisers is long overdue and something Aifa has been calling for. We must now see these warm words from the FSA put into action.”
Adviser Alliance founder and director Alan Lakey says “I do not believe for a minute the regulator will bring it back. The FSA’s reasoning on this has always been that the industry has to provide evidence to support a long stop and show it will not affect consumers but, by definition, a long stop will affect the consumer.”