The Financial Services Authority (FSA) has removed the audit requirements for advisers and appointed...
The Financial Services Authority (FSA) has removed the audit requirements for advisers and appointed representatives (ARs), which could save the industry an estimated £12.9m a year.
From the end of 2006, financial advisers and ARs who have an annual turnover of less than £5.6m will no longer have to audit their accounts for the FSA.
The decision follows a review conducted by the FSA last year, which found the audit did not offer the investor any extra level of protection.
Robin Gordon-Walker, press officer at the FSA, said: "We found we can get the same information under the retail mediation activities return regulation as we can in an audit.
"As most financial advisers have to report under this regulation an audit is no longer necessary. To continue to have an audit would not be creating a fair playing field for advisers and would be adding an extra layer of costs to them."
The decision to remove the audit requirement has been part of an ongoing overhaul by the FSA to remove additional layers of regulation.
In September 2005, the Department of Trade and Industry (DTI) amended the Companies Act to exempt small FSA-authorised firms that only undertake mortgage and general insurance business from the audit requirement.
The latest changes are in the process of being finalised by the DTI.
FSA removes audit requirements for advisers
Audits have created extra layer of costs for advisers
The same information can be obtained through retail mediation activities
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