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Tories will probe FSA treatment of advisers

The Tories are setting up their own committee of experts to scrutinise any heavy-handed treatment of IFAs by the FSA.

The committee will focus on the way in which the Government has increased the regulatory burden on business in general but one of its main focuses will be the powers of the new regulator. The plan was revealed by Conservative Shadow Industry Secretary David Heathcoat-Amory at the Tory Party conference this week.

Heathcoat-Amory said he is convinced regulatory red tape must be cut if IFAs are to survive.

He argues the Financial Services and Markets Act underpinning the FSA has the potential to create a super-regulator with few checks on its power. He also believes the way the regulator is deciding the fate of polarisation is an example of the FSA taking responsibility for something which should be debated in Parliament.

He says: “IFAs are often at the receiving end of a lot of form-filling and regulation, which may save the backs of the regulators when things go wrong but actually ends up in danger of making financial advice more expensive, to the detriment of the consumer.

“On polarisation, there has been no Parliamentary debate and we will probably be presented with a fait accompli. It is a critically important debate, and it should be held in committee and possibly on the floor of the house. These matters should not be decided behind closed doors.”

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