I thought that it might be useful to keep readers informed of where we are now six months on from the closure of Park Row. Our experience could be very relevant to all advisers who are linked to a network. No matter what your qualifications are, do not assume that good practice, high levels of service and integrity or lack of client complaints will protect you in the future.
Indications are now that it could be the end of June before authorisation is considered (this will be nearly sevenand-a-half months from the date of closure) as client redress letters following the KPMG business review are still in the process of being sent and clients will be given up to four weeks to respond (I have had no clients contact me yet to say they have received letters). The categories of advice that are being reviewed are Pension Transfers, income drawdown, annuities, investment bonds, structured products and advice to the elderly. Most of the above categories required “specialist” authorisation which is why so many advisers with “high” levels of qualifications are still not authorised. We have been advised that if the Park Row desk-based monitoring team originally passed the case (pre-approved) and redress is requested by a client, the adviser will not be asked for any contribution towards any PI excess. What is very worrying is if DBM did not pass the case (that is, it did not require preapproval), Park Row is reserving judgement on whether to pursue advisers for full/part costs. Also, if any redress is rejected by a client, then this will be considered to be a formal complaint.
Also, the following points and client impact do not seem to have been fully understood by the FSA:
- How can an adviser be authorised one day and then suddenly not? The constant reference to “fitness and propriety” by the FSA is a real kick in the teeth
- Why we are being penalised/made an example of when we only followed the procedures that were put in place for us by Park Row?
- A very relevant point raised by Robert Reid is the way in which files are being reviewed – a number of advisers have challenged the outcome of “failed” file reviews which when reconsidered have been regraded as suitable. We have never been told what qualifications the file reviewers possess (apart from being appropriate) but it is worrying that the FSA is placing such an emphasis on their results. We are also not going to be given access to the details of the file reviews or the MI reports that are sent to the FSA following the completion of the business review. Surely this would enable us to ensure that any record failings in the files are not repeated?
- The number of clients (who have immediate planning needs) I have had to refer to other IFAs and the inconvenience caused to them as well as the associated loss of income and future income to my business
- Not being able to adhere to the FSA’s treating customer’s fairly principles and the inconvenience/detriment being caused to my clients through lack of service/advice
- The long-term impact on my business and the job security of my staff
- The possible loss of my accountancy introducer after 20 years of association.
I thought that the FSA were here to help. I would have been more than happy for the FSA to authorise me, discuss my compliance procedures and guide me through any identified weaknesses which could then followed up with a reviewable action plan. It is worrying that the FSA can bring my business (and others) to a standstill and potentially destroy it. Let’s hope for an imminent conclusion to the whole situation so that I can get back to what I enjoy – advising clients.
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