Many individuals are currently struggling to gain FSA permission to perform a controlled function.
Take former Park Row advisers for example, the high number of column inches and comments on the Money Marketing website regarding this issue proves it is a very emotive subject.
There are a number of issues here, the main one is the old ‘sponsoring’ firm which has purportedly been unable to train former direct sales people when thrown into an alien independent environment and bring them up to the same level as an experienced IFA.
As far as Park Row is concerned the serious issue is the KPMG file review exercise which in my humble opinion is fundamentally flawed because (a) it bases many declarations of ‘inappropriate’ advice upon charges alone and (b) it assumes that the AR was responsible for the content of Terms of Business and Reasons Why documents. Also, we have the blunderbuss approach from the FSA permissions department which uses all this ‘intelligence’ to, in effect, permanently ban the individuals from continuing to advise consumers.
This isn’t a matter of ‘reauthorisation’ because ARs are exempt from authorisation. This is a matter of risk and as networks are the highest category risk on the FSA radar it is clear that those who have not demonstrated that they are capable of properly supervising their ARs and ensuring they are trained to meet the ‘Fit and Proper’ requirements of an Approved Person will not be allowed to take more on the books. This is particularly the case when the standard of advice has been shown to be poor in the previous firm and the adviser has been unable to demonstrate that they are indeed capable of meeting the FIT requirements. However I am very concerned by what I perceive to be a flawed file-checking exercise and the FSA’s unquestioning reliance upon the ‘intelligence’ it has gathered.
When considering the impact of the new ‘intrusive supervision’ regime at the FSA it is worth pointing out that tests of competence in life are many and varied, the driving test is one example where failing to pass does not prevent you from driving for the rest of your life, you are allowed to drive while supervised and can have as many attempts at passing the test as you wish, or can afford.
You may be wondering how a one man band can possibly survive in this new environment let alone start up in business without someone ‘Fit and Proper’ in the passenger seat. Society is in dire need of regulatory balance, I see none.
Evan Owen is a regulatory consultant