The Financial Conduct Authority (FCA) is reviewing its authorisation process to determine how it can better stop "bad actors" from re-entering the industry, it has said.
Speaking at the presentation of its business plan, the regulator's investment wholesale and specialist director of supervision, Megan Butler, said the FCA was aware of individuals moving from firm to firm as well as phoenixing firms.
She said: "It's a concern the industry has and it's a concern we share. And it's one where we are gathering the best data we can and working with the industry to do that. It's very important we keep some of those individuals and firms out of business."
Phoenixing has become an increasingly greater concern for advisers with Financial Services Compensation Scheme (FSCS) levy costs rising significantly in recent years.
Last June, the FCA refused to authorise an advice firm after it found the two advisers in charge were attempting to rid themselves of £1m worth of Connaught liabilities.
But FCA director of supervision Jonathon Davidson said while the regulator was aware it needed to stop the re-entry of fraudulent players into the industry, it was midful of the need to promote competition in the marketplace.
He said: "We need to establish a level of operational efficiency because what we want to do is make sure authorisations are not just defending the perimeter against bad actors coming in but also helping to fulfil our operational objective to promote competition in the interests of consumers.
"What we're looking at is ways we can not only identify firms that don't meet threshold conditions but also help firms to identify what they need to do to meet threshold conditions so we can actually drive that objective."
He added: "We're looking at how we can improve our MI to really pick up on those forms of intelligence about what is going on in order to deal with those issues."
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