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Thoresen and TCF set to go live

There’s now only one week to go before Otto Thoresen launches his report on generic advice and we’re all interested to see what it contains.

But, in the meantime, there have been some interesting developments in regulation to fill the wait period.

Last week the FSA sent out a warning to advisers ahead of its March Treating Customers Fairly deadline, suggesting a third of firms have not got the correct systems in place to test TCF.

In its newsletter to financial advisers the FSA says between September and December 2007 it carried out visits to 50 adviser firms to review process for giving advice, including management information. A further 50 firms were mystery-shopped.

Although the visits are still being analysed, the FSA says around a third of firms were not actively analysing and using management information they had gathered to review their processes and test whether they were treating their customers fairly.

The newsletter says: “It was disappointing that, in spite of producing some form of MI including Key Performance Indicators, so many firms failed to consider these on an ongoing basis as part of their monitoring of advising practices. In addition many firms did not adequately consider findings from their review of customer files as part of their MI.”

The newsletter also highlights a recent review by the FSA into whether firms are doing enough to ensure appointed reps are treating their customers fairly.

It found a number of issues with the 35 firms who participated including firm’s own written procedures not being followed in practice, too much reliance placed on the remote checking of client files and poor progress with treating customers fairly.

The newsletter says: “Whilst the results for the financial adviser sample were somewhat better than the other sectors, there are over 1,300 ARs conducting business of behalf of small financial adviser firms. Firms need to ensure the ARs they recruit are fit and proper and that their customer facing staff have the necessary knowledge and competence to advise customers.”

The Association of Independent Financial Advisers has launched a service for IFAs who have hung up their adviser hat but are still liable for previous advice.

Aifa says retired advisers or those who have moved within the industry need to be aware of their liabilities, responsibilities and legal position on leaving the profession or winding up a firm.

Members of the retired IFA service will receive factsheets on complaints and the regulatory position concerning retired IFAs and time-barring of endowment complaints.

It will also address how the Financial Ombudsman Service and the Financial Services Compensation Scheme work post de-authorisation and how to protect personal assets against complaints.

Membership also includes access to the Aifa helpline, which deals with matters on regulation and policy, a referral service to specialist advice and regular updates on changes to relevant regulation and legislation. The service costs £250.

Aifa deputy director general Fay Goddard says retired IFAs can still be liable for the advice they gave up to 15 years ago.

She says: “We have found that there is an increasing demand from retired IFAs who do not have the protection of limited company status for guidance in this area. That is why we are providing this service. IFAs often don’t know what they should do or how they should handle complaints, or enquiries relating to past business.”


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