The FSA has criticised IFAs' record-keeping in a letter to industry leaders, including chief financial ombudsman Walter Merricks, and pledged to give full weight to record-keeping standards as part of proposals for enforcement on misselling.
In a letter circulated to attendees of a June misselling round table and seen by Money Marketing, FSA consumer investment and insurance managing director John Tiner raises concerns that the industry is leaving itself open to misselling because it is unable to keep adequate records of advice given to clients.
Tiner says: “Action is required by firms to address what in too many cases remain poor standards of record-keeping.”
FSA spokeswoman Louise Buckley says: “Historically, we have always said the industry needs to pull its socks up on this issue but recently this has come more to the fore in our thinking.”
LIA head of public affairs John Ellis says: “This is a new emphasis for the FSA. I do not think it has done enough on this issue but it may be for the best of reasons. If the FSA was focused on record-keeping, it would probably be seen as heavy-handed and creating red tape.”
Aifa director general Paul Smee says: “Good record-keeping will help IFAs to stay out of trouble but the point is to get towards a proper definition of misselling and we are not even close to that.”