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‘Training shift could leave small advisers out in cold’

Regulation expert warns that providers could find it uneconomical to train small firms

FSA moves to offload responsibility for training on to providers could freeze out small advisers, warns a leading regulation expert.

The Consulting Consortium managing director Joanne Smith says a recent speech by Sarah Wilson, the FSA director responsible for Treating Customers Fairly, suggests the regulator is trying to put more responsibility on providers, despite its insistence otherwise.

Wilson argued in her speech that asset managers should be responsible for product design, testing, appropriate marketing and the training of intermediaries.

Smith says the same approach could apply to the relationship between other providers and advisers. She warns that providers will effectively be required to license intermediaries on a product-by-product basis and could find it uneconomical to deal with smaller intermediaries.

She says : “Although the FSA has elsewhere strenuously denied that it is its intention to do so, these comments look very much like an attempt to transfer some responsibility for monitoring and controlling intermediaries from the FSA to product providers.

“The mixed messages from the FSA are less than helpful. If providers were required to license intermediaries to market on a product-by-product basis, the resource implications alone would be considerable. Dealing with smaller firms could also become less economic. Providers must resist these attempts.”

FSA spokesman David Whitely says: “It is true that a product provider will have different TCF issues to consider than those of an intermediary and we recognise that there could potentially be some blurring of responsibility in this area.

“But situations such as this are precisely why the FSA has devoted immense time and resource to working with firms on what our TCF principles mean for the industry in practice.”


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Case study: administration — managing group life schemes

Our client leads the global market in high-tech electronics manufacturing and digital media. The trustees of the company’s final salary pension scheme insure death-in-service lump sum and dependants’ pension death benefits for active employees, as well as dependants’ pension benefits for deferred members (those who have left service).


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