An IFA has accused the Financial Conduct Authority (FCA) of not staying on top of its policing mandate and has called for a greater crack-down on advisers that are violating its rules.
Barretts Financial Solutions managing director Kim Barrett (pictured) called on the regulator to step up its game after hearing of advisory firms being sold because the advisers were not qualified to practice.
One year after the implementation of the Retail Distribution Review (RDR), which introduced mandatory QCF LEvel 4 minimum qualifications for advisers, Barrett said this was "disgusting".
Worried that advisers might have been practising unqualified after January last year, he said the FCA should have acted sooner to pressure advisers to abide by its rules.
Barrett said: "Judging by the fact that I am talking to people who buy and sell financial services practices and they are getting people phoning them up today who are having to sell their practices because they haven't got the exam qualifications they need, which is over a year behind the curve, is disgusting.
"Again it is an abject failure on the part of the FCA to do their job properly. They are supposed to be policing the industry.
"It is a criminal offence to give advice if you are not qualified. It's not rocket science. The FCA know the advisers, they are on a register."
Barrett suggested that efforts such as sending out mailshots to advisers would have made "a lot of people think hard about continuing to practise without the relevant qualifications".
But the FCA said it was working with its register and accredited industry bodies to stay on top of unqualified advisers.
It said 97% of advisers were qualified, with the rest either working towards qualification or having been allowed to defer it.
Advisers may be allowed to defer their qualifications in certain circumstances, for instance if they have a serious illness or act as a carer for somebody. But these advisers are unlikely to have been doing much business during that time, according to the FCA.
A spokesman said: "We are taking action against individuals and firms who aren't qualified to the required standard."
Last month marked the first time the regulator cracked down on a firm that didn't have any qualified advisers.
Other advisers have recently spoken out about the threat to consumers from the ‘shadow industry' of unregulated advisers which were more and more found to be preying on consumers post-RDR.
EIS and Seed EIS sectors
'Truly making a difference'
Avoidance, evasion and non-compliance
From 6 April 2019