The FSA's proposed overhaul of the rules on financial advice that would allow banks and insurance c...
The FSA's proposed overhaul of the rules on financial advice that would allow banks and insurance companies to sell the products of other providers has been lambasted by a group that represents independent advisers, says the Times.
Paul Smee, director-general of the Association of Independent Financial Advisers, said the regulator was using a "sledgehammer to crack a nut" by planning to end the 14-year-old distinction between tied agents and independent advisers.
He said that the Financial Services Authority's own research indicated that independent advice was best, yet, by ending polarisation, it was likely to force many firms out of business or into mergers.
The proposals have split the wider IFA community. While the bigger firms gave the reforms a cautious welcome yesterday, others expressed alarm, particularly at the FSA's plan to force independents to charge fees rather than accept commissions. They voiced concerns that the balance of influence over the market would be tilted in favour of the large distributors such as banks.
The Times reported that growth in Britain's economy halted in the final months of last year after the sharpest slump in manufacturing for more than a decade, economists said yesterday.
Manufacturing output tumbled by a worse than expected 0.7%in November to leave it 5.4 per cent down on a year earlier - the steepest annual drop since the depths of the last recession, in 1991.
Following these remarks from economists, the FT writes, the Bank of England has stated that the UK economy is not ready for a raise in interest rates.
Sir Edward George, governor of the Bank of England, on Monday night played down expectations that the Bank might soon put up interest rates, saying: "I do not suggest that the timing of any such move is imminent."
The pressure on accountants Arthur Andersen for its role in the Enron debacle intensified yesterday after investigators uncovered a memo ordering staff to destroy all material relating to its audit of the collapsed power business, the Daily Telegraph reported.
Andersen, which earned $1m (£690m) a week in fees from Enron, admitted last week that some documents requested by the US Justice Department and other watchdogs have gone missing. It now emerges that staff working for Enron were ordered in an October 12 note to shred all but the most basic "work papers" just days before the company revealed a loss of $618m.
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