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This week in Regulation

The FSA has been machine-gunning out speeches aimed at the adviser market with at least six in the last two weeks laying out the regulator’s latest musings on wrap, TCF and the distribution review.

Aifa director general Chris Cummings worries we are moving to a “regulation by speech” environment with advisers expected to keep their ears and eyes to the ground to ensure they do not miss anything important from the regulator’s rhetorical indulgences.

Of course he says there is a bright side as it is keeping him – and quite a few journalists- in a job rifling through website pages and attending conferences to digest any new direction or intended emphasis on a particular subject.

FSA asset management sector leader Bruce Robson’s recent address to the Pima conference set out some of the issues the FSA is still grappling with when it comes to wrap.

The regulator clearly sees the potential for the role of wrap platforms to play a major positive part in its current distribution review and form the backbone of alternative models.

But Robson was clear the FSA would not tolerate advisers using the platforms as “smokescreens” to justify extra payments without a corresponding consumer benefit or as a way around network compliance checks.

He said he was disappointed to hear about recent examples highlighted in the trade press and although the FSA will be working to see how it can remove regulatory barriers to ensure wraps can flourish it will be keeping a close eye on advisers looking to abuse platforms.

At last week’s FSA TCF conference Clive Briault emphasised the impending March deadline for firms to show there are progressing steadily with TCF.

Briault warned those slacking by early Spring are likely to be hit with the FSA “bringing them to the stage”.

An FSA survey of delegates shows most advisers think they are well on the road to TCF safety, with 22 per cent saying it was already embedded, 44 per cent in the process of integrating the regime and 26 per cent at strategy and planning stage.

The results may well be skewed by the fact the type of adviser that is willing to come along to a TCF conference in London is more likely to already be “on message” with regards to the regime.

But there is also the worry some advisers may think their firm’s activities are up to scratch with regards to TCF while the FSA thinks differently. Certainly previous FSA evidence has suggested a less progressive attitude to TCF in the advice sector.

Elsewhere the Treasury select committee cranked up its PR machine with the circulation of comments from a letter from chairman John McFall calling on the FSA to name and shame firms that fall foul of financial promotion rules.

McFall wants the regime to closely mirror the Advertising Standards Agency who list guilty firms on its website.

The FSA has previously said it prefers the approach of a private nudge to make sure the offending literature is removed but points out it has bared its teeth recently in this area with its GBP55,000 fine of the Ancient Order of Foresters Friendly Society. It has also passed on various promotions to the ASA to deal with themselves.


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