The FSA is looking to change the way in which it handles its supervisory visits to IFA offices but w...
The FSA is looking to change the way in which it handles its supervisory visits to IFA offices but warns this does not mean it will ease its requirements for firms.
Speaking at the Aifa conference in London last week, Michael Folger, director of investment business at the FSA, said the authority may look to cut down on its visits to firms and move to more 'desk-based' supervision.
Folger, whose responsibilities include the supervision of some 6,000 investment firms including IFAs, said the authority is looking to shift away from going back several times to a company if there is a problem, instead it may choose to issue a bulletin to the public.
He said: "Visits to companies may become more themed based, such as when new products are launched, although there will still be some regular visits.
"Using more desk-based supervision, we will look hard at the data that is given to us. We will be prioritising on the areas of highest risk, but this does not mean the individual practitioner will be ignored."
While a network may have a greater impact it would probably be less in danger of having something go wrong since it would have the resources that smaller IFAs would not, such as dedicated compliance officers, he said.
Lots of small players cover a large portion of the life and pensions distribution so this would be consider a high impact, Folger added.
In examining firms the FSA will focus on risk management and plans to concentrate on four key areas. These include maintaining market confidence, promoting public awareness, protecting consumers and reducing financial crime.
Folger said: "Many of the public have a poor understanding of the financial services and often can not understand the pros and cons of investment products. This will be tackled through two FSA initiatives, improving the general literacy of the public and improving the information that the FSA supplies."
The comparative tables are not league tables, he stressed, in that they will not show who has done well or who will do the best, nor that cheaper is better.
He said: "It will help to enhance the view that there is a wide range of products available and help the consumer understand better what is being recommended."
Folger said that while the authority will not use past performance in the tables, this will not prevent companies from advertising their performance, although it would be monitored to ensure that the figures used were not misleading to consumers.
He said further information on strategic procedures the authority will look to introduce will be released sometime before Christmas.
Folger also touched on the issue of polarisation in his talk to IFAs and said that no decision has yet been made by the FSA but that it will be published once it has been made.
He said: "One key issue is to safe guard the understanding some have of independent and tied. However, we must also look at the fact that tied agents who can sell a wider range of products could bring prices down for consumers."
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