Capital requirements 'won't change firms' behaviour' - AIFA

The association says there are examples elsewhere in the financial industry which prove prudential rules are not necessarily an effective incentive for firms to reduce the frequency of mis-selling. The FSA yesterday published a discussion paper on mis-selling across the advice industry suggesting, among other things, that adviser firms meet the costs of claims made against them out of their own cash rather than via the FSCS. The paper suggests prudential requirements should focus on reducing the risk of a firm causing detriment to consumers, and other firms paying the FSCS levy, by mis-...