Advisers have accused FSA officials of presenting proposals in CP121 which run counter to its own re...
Advisers have accused FSA officials of presenting proposals in CP121 which run counter to its own research, suggesting there is strong consumer support for independent financial advice.
John Tiner, managing director of consumer, investment and insurance directorate at the FSA, got a cool reception from intermediaries during questions about his speech on CP121, plans for the reform of polarisation and other issues when he spoke at the LIA conference in London today.
His speech was designed to explain how the FSA was trying to rebalance what it saw as aspects which run counter to its aims of delivering a quality financial services system for consumers, in the form of an "N2½" update.
However, the response Tiner received from the 100 intermediaries and industry representatives listening was far from friendly after his speech, when several people in the audience openly questioned the FSA's intentions and aims, as well as the consumer research (paper 2) which is being used as one of the key arguments for FSA action.
One IFA received applause from most of the audience when he accused the FSA of attempting to disenfranchise 90% of the IFA population, even though its own consumer research in CP121 showed consumers wanted independent advice.
Earlier in his speech, Tiner previously said: "Many people think we had a solution mapped out before we did the research into consumers and advice, but we did not. While some people said the research only covered a small number of firms, we are satisfied it is statistically stable."
When questioned by Ken Davy, former chairman of DBS Financial Management, Tiner said he would discuss with colleagues at the FSA whether the regulatory body would be prepared to open access to that research to the public.
The FSA still refuses to say whether proposals for the deferred payment system (DPS) will go ahead, however, he praised alternatives offered by the industry and said officials were looking seriously at options put forward.
Tiner also stated that polarisation was likely to be abolished completely following consultation with the industry on plans for reform.
"We have had around 500 responses to the CP121 consultation from various institutions, organizations, bodies and IFAs, and they were of pretty firm view that abolition of polarisation is the right answer. We have firmed a view of our own research that this is the right option," says Tiner.
Tiner admitted he, along with much of the industry, expected the IFA sector to be reduced in size once polarisation reform was introduced.
Tiner added the FSA had been in regular discussion with Ron Sandler, with the intention of ensuring both parties are working on approximately the same objectives and in the same direction, to prevent conflict and confusion.
Tiner linked discussions about Ron Sandler to the FSA's own review of with-profits, suggesting that both parties would be seeking greater transparency of with profits products.
The FSA will report on the next phase of its with-profits review at the end of May, said Tiner, just before Sandler is expected to deliver his report in June.
On the back of comments about with-profits transparency, Tiner revealed another consultation paper will be released later in the summer to review the disclosure regime and the amount of information clients are given when receiving advice and looking at products.
He further added that details of the rules governing Training and Competence (T&C), as discussed in DP9's consultation on the training and ethics of the financial services sector, will be unveiled in September, after further discussion with the industry.
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