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AIFA welcomes FSA pledge on retrospective action

The Association of Independent Financial Advisers has welcomed the Financial Services Authority’s promise not to judge financial firms retrospectively.

At the Personal Investment Marketing conference, Stephen Bland, director of small firms at the FSA, told delegates it will not take action against firms for mis-selling after the event, provided they meet its requirements under its high level principles and the rules set out in its handbook.

Bland says: “The FSA believes firms should be assessed against the assumptions that were reasonably made in the regulatory context of the time and there should be no retrospective application of later, more exacting standards. This has always been our view as we move towards principles-based regulation.”

Bland adds that it will be helpful to look at why retrospective action by the regulator has been raised as an issue in the past and emphasised his support for AIFA’s Stakes in the Ground project which documents the business environment and practices.

Tracey Mullins, director of public affairs at AIFA, says: “The regulator has said it will judge advice given by the standards and rules at the time of the sale. Our Stakes in the Ground project, which will document the regulatory, political and social environment of today, will be a useful tool in the years to come.”

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