RDR and capital requirements may force firms out - FSA

A review of prudential rules for Personal Investment Firms (PIFs) has found investment advisers and networks will need to raise an additional £600m to £850m capital by 2013, with six to seven individual businesses requiring over £20m. According to FSA estimates, as many as 14 firms may need to raise up to £20m, potentially contributing about a quarter of the £850m target. Under plans confirmed by the regulator today, PIFs must now have the equivalent of three months annual expenditure in capital reserves, with the minimum requirement for all firms jumping from £10,000 to £20,000. Curr...