The Financial Services Authority is in the dock again over its treatment of IFAs regarding Retail Mediation Activities Returns as another firm has complained of poor treatment at the hands of the regulator.
Intermediary firm Thompson Prior is questioning the FSA's right to require intermediaries to treat their customers fairly when it does not appear to have applied the same rules to its small firm customers.
Alison Prior, partner at Thompson Prior, says despite both informing the FSA one of the firm’s partners had left to set up his own business and subsequently filing two correctly-completed RMARs, the FSA has still invoiced the firm for fees relating to three advisers working for the company.
Moreover, regulatory officials have so far refused to acknowledge they have made a mistake and are demanding full payment for the FSA fees.
Prior says the firm was told in a "very heated" telephone discussion with FSA staff there was nothing it could do, there would be “no negotiation” and it must pay the incorrect invoice in full, even though the firm has evidence to prove the FSA has acknowledged it received notification of changes to its adviser base.
Prior says the firm wrote to the FSA on 9 January 2005 to notify the regulator of the change to its business and received a confirmation letter from the FSA noting former adviser Nick Thompson had left in February the same year to set up his own firm.
Following this, the IFA firm completed two RMAR forms (in October 2005 and March 2006) giving details of the two advisers still operating within the company.
Prior says after the firm's telephone conversation with the FSA she sent a full copy of all the paperwork by recorded delivery on 20 July to show Thompson had left but having heard nothing by 1 August she wrote again, sending the paperwork by recorded delivery once more and expressing concerns as the fees were now due.
When the firm again received no response, a call to the FSA revealed the allocated fees disputes manager at the FSA is out of the office until 14 August so is unable to resolve the matter while demands are still being made for payment of the FSA fees.
“Apart from being furious about the mistake and the absolutely uncompromising attitude of 'pay or else' we can't believe that an organisation which is plugging 'treating customers fairly' can be so obdurate,“ says Prior.
“No acknowledgment of our complaint or letters has been received and there has been no attempt to reconcile the situation. It is clearly a mistake on the FSA’s part but it is not prepared to admit it and put it right. What would be its attitude if we behaved like this with our clients?”
“Even if a firm does make a mistake and tries to correct it, the FSA is proving to be impossible to deal with - it is quite simply unfair and totally unacceptable,“ Prior adds.
John Ellis, head of public affairs at the Personal Finance Society, has echoed Prior’s sentiments and has called for a review of FSA procedures saying
"It sounds to me like the FSA's system is a bit inflexible and it ought to be reviewed. I've heard similar stories in the past where the FSA has not reacted quickly enough to a change. They need to review their system and I will raise the matter with them if the opportunity arises."
But Fay Goddard, deputy director general at the Association of Independent Financial Advisers (Aifa), says the FSA is technically right in this particular case because firms must inform the regulator of any changes before 31 December for them to apply in the following financial year.
No spokesperson from the FSA was available for commenting at time of writing.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Matthew West on 020 7484 9893 or email [email protected].IFAonline
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