Adviser support services companies have defended their unregulated status following renewed concern among advisers.
Chris Smallwood, chief executive of national IFA 2Plan Wealth Management, says the likes of SimplyBiz and threesixty should not be able to offer certain services, such as compliance, if there is no FSA oversight.
Support companies say they would have "no problem" should the regulator decide to stringently monitor their work, but add it would be "unnecessary" as they operate in an advisory capacity only and exercise "no control" over distribution.
IFAonline has been told the FSA has held several discussion with support companies in recent years but has each time opted not to get involved. The FSA says it is unable to confirm or deny this as it can not comment on unregulated activity.
"How can a company offer compliance services if it is not regulated?," Smallwood says. "It is a misnomer, the two do not fit."
Smallwood says if complaince support involves helping firms meet the FSA's conduct of business and operating guidelines, the regulator must be involved.
"Financial services is a regulated industry and where is the comeback for the IFA there? Where does the client sit in all this too?"
IFA support businesses generally offer IT and compliance support as well as training, conduct of business and business development.
SimplyBiz, which calls itself the UK's fastest growing FSA compliance service company, is regulated in certain areas but not, according to chairman Ken Davy, in its compliance support.
"It is hard to see where it would add value," he says. "But if the FSA did decide to regulate compliance companies it would not be a problem."
David Ingram, partner at threesixty, adds: "I don't think we'd have any difficulty supporting the idea of being regulated. We operate to the highest possible standards so if the FSA did decide to regulate us we wouldn't have a problem with that.
"Saying that, I don't think it is necessary because we don't take responsibility for the compliance in firms, we just act in an advisory capacity, in the same way that a firm's solicitors might do."
Positive Solutions chief Jim Reeve agrees. "Why would support firms be regulated? They have absolutely no control over distribution."
Contact: Scott Sinclair, News Editor, 020 7484 9791 - [email protected]
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