The proposed 12-month period where advisers will be unsearchable on an FCA-regulated database has been likened to an idea from Blackadder's sidekick Baldrick, whose "cunning plans" were ridiculed for their stupidity.
In policy statement PS19/7, published on Friday (8 March), the Financial Conduct Authority (FCA) revealed there will be a 12 month period between December 2019 and December 2020 when advisers will not be searchable on any regulated public register or directory.
Advisers who are not held to be ‘senior managers' under the regulator's incoming Senior Manager & Certification Regime (SM&CR) will be taken off the financial services register on 9 December 2019 when the regulation comes into play.
At the same time, advisers will not appear on the new directory, which will hold information on every single financial adviser, until December 2020. This means there will be a whole year where advisers cannot be searched by consumers on an official, regulated database.
News of the year-long hiatus did not go down well among the adviser community. Perceptive Planning director Phil Billingham said changes would be a negative for consumers and advisers alike, with consumers unable to check out potentially unsavoury or unregulated advisers, and advisers suffering reputational damage as a result.
"I'm a bit gobsmacked," he said. "Having told consumers ‘this is where you look up advisers', [the FCA] is now removing that for no good reason."
Billingham also wondered why the regulator wanted to remove advisers from the register in the first place.
"What benefit is it to consumers to remove advisers from the register?" he asked. "Just leave it - none of this makes sense. There is no sense or logic, and it has never been justified.
"Anybody who can read and write says it is a bad idea. It is Baldrick levels of stupidity."
'A terrible idea'
IFS Wealth & Pensions Chartered financial planner Ricky Chan felt the FCA should extend advisers' place on the register to cover the time before the directory goes live in order to mitigate poor consumer outcomes.
"I have always been against the FCA dropping 'normal' advisers off the register - and the FCA's answer has always been 'we're launching a new directory that will host everyone'," he said.
"Given there is going to be a gap, it only makes sense that they should postpone cutting advisers off the current register."
Chan also voiced concerns the hiatus could end up going on for longer than 12 months. "It is a terrible idea, even if it is going to be a relatively short one-year gap," he said. "Consumers looking for advice during that time will want to know where is a register for them to verify the advisers and, if there isn't one, then there is potential for poor consumer outcomes.
"There could also be issues when launching the directory that cause delays, so it might not even be December 2020. It could be even longer and, in the meantime, you have clients and prospects unable to search. And from the regulator, that is unacceptable."
For his part, Phil Bray, founder and director of adviser marketing firm The Yardstick Agency, described the move as "perverse".
"At a time when financial scams are still rife, it has never been more important for the general public to ensure they are dealing with a regulated adviser," he said.
"It is therefore perverse the FCA will soon take advisers off the register for up to a year. Surely a solution could be found that allows the existing register to be kept live, while the replacement is developed? By making it harder for consumers to understand whether an adviser is regulated, more will be left open to falling victim to a financial scam."
Professional Adviser has approached the FCA for comment.
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