View more on these topics

Transfers are the top target for regulator

Grant Thornton has warned that the FSA is taking a tough line on pension transfer business, with firms having to prove their advice is “positively suitable”, rather than just not unsuitable.

Speaking at the PIMS conference on board the Arcadia last week, Grant Thornton senior manager Scott Soper said that pension transfers are top of the FSA’s agenda.

He said: “At the moment, the focus is on personal pension to personal pension transfers, where the FSA is saying, we cannot prove they are unsuitable but equally we cannot prove they are suitable, and they are taking the line that neutrality is not good enough. They must be positively suitable rather than just not unsuitable, which is worrying.”

Last month, the FSA told Money Marketing that four firms had been referred to the enforcement division over pension switching advice, with 15 others offering or being forced to undertake past business reviews. AWD was fined £1.2m in November last year and told to compensate clients.

Speaking more generally, Soper said “a small minority” of advisers are undermining the FSA’s ability to protect IFA interests in Europe.

He said: “It is a bad time for all this to be coming out because now is the time we need the FSA to be empowered and taken seriously at a European level to fight for our industry.”

Soper also warned against the FSA’s recent habit of “stealth regulation”, for example in the application of its best execution rules to IFAs arranging business from November last year.

“This means you are treated now as a stockbroker. If you have a transaction to do you have to execute it with the retail client by the most efficient lowest cost route you can. That was hidden in a quarterly consultation and policy statement last summer and snuck into the rulebook.”


Ecclesiastical screens

Rob Hepworth has plenty to be positive about. A senior fund manager at ethical investment house Ecclesiastical Investment Management, he has been one of the few fund managers to have benefited from the economic storm that has wrought havoc through the industry and wider economy over the last two years.

Solid bric lays foundations of recovery

With the first formal Bric summit ending last week, these nations are beginning to flex their financial muscle and are showing significant potential for growth despite the economic downturn.


News and expert analysis straight to your inbox

Sign up


    Leave a comment