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Regulator to give early warnings on problem companies

The FSA is planning to take the unprecedented step of issuing public guidance about specific problems with firms which could see it give early warnings over stricken companies such as Equitable Life.

Unveiling the plans at the Raising Standards conference in London this week, FSA managing director John Tiner, who is widely tipped to become the regulator&#39s next chief executive, accepted that the move would be fraught with legal difficulties.

The FSA has avoided giving out information on individual firms to the public or to IFAs. But it has been stung by criticism of its handling of scandals, in particular those surrounding Equitable Life, Independent Insurance and Aberdeen Asset Management. It has also been criticised by IFAs for issuing regulatory updates on Equitable Life, warning IFAs to be careful when recommending that clients should transfer from Equitable.

Tiner said: “We are looking at disclosing potential problems with individual firms. We are drawing up guidelines about when it would be suitable without damaging the marketplace.”

Hargreaves Lansdown pensions development manager Danny Cox says: “It is an excellent idea. It will make it easier for us to recommend clients transfer out of companies. But it depends on the kind of guidance. If it is woolly and the FSA sits on the fence it will not make life easier.”

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