The Association of IFAs (AIFA) says it will step up its bid for a regulatory dividend for well-run advisers after the FSA turned down the proposal.
AIFA policy director Andrew Strange says the regulator should introduce a "dashboard" of measures, including fewer FSA visits or lower fees, for low-risk firms.
He says the Association will make the proposal a key part of its response to the Retail Distribution Review (RDR) feedback statement published on 25 November.
The FSA turned down calls for a regulatory dividend, which it admits came from a large number of advisers as well as trade and professional bodies, arguing it already adopts a risk-based approach to supervision. "Firms that pose a risk to our statutory objectives receive more attention than those who do not," it said.
But Strange says: "The FSA said it struggled to find risk factors that are appropriate, but this is something we will be pursuing.
"There must be a dashboard of measures - lower FSA fees or capital requirements, or a non-monetary benefit such as fewer visits. A good firm, for example, could only be visited every five years."
The most common suggestion in the RDR feedback was for FSA, FOS and FSCS fee rebates, or for a 'no claims bonus' scheme to apply to professional indemnity (PI) insurance.
But in its feedback statement, the FSA said: "Although firms may be disappointed that we are not proposing additional regulatory incentives, we believe the medium-to long-term business opportunity far outweighs the benefits of any regulatory incentive.
"We expect that as our proposals address the root causes of problems in this market, the need for supervisory attention should reduce."
However, advisers say the issue has not been dealt with sufficiently by the FSA. Chris Smallwood, CEO of 2plan Wealth Management, says: "This [regulatory dividend] does not appear to have been addressed in this [RDR] paper in terms of matching risk with capital requirements."
Contact: Scott Sinclair, News Editor, 020 7484 9791 - [email protected]IFAonline
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