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What is the point of FSA registration if advisers aren’t even named?

From Ian McIver

Michael Norwood’s letter (Mortgage Strategy December 5) where he asks the question “Am I an IFA?” is an interesting one. Prior to mortgage/GI regulation, my network was an IFA network and it still is. Some members did pensions, some did investments, some did both – it didn’t matter really. The broad rule was that you were in financial services and were regulated as such. But this is the important bit. For each person (note person, as the firm is largely irrelevant), we send a form to the FSA when they join. This then means that:

  • The FSA knows who is in my network;
  • The network has a corresponding match;
  • Most importantly, the public has access to the FSA database, from which they can see the name of any adviser purporting to be regulated.

All simple stuff. Even I’m with it so far.

Then mortgage/GI regulation came along. It should have been fairly easy really, and you’d think we would have all adopted the same rules. I extend my network permissions to encompass mortgages/GI and off we go – same process for anyone then joining, just a wider choice. Or so you’d think.

Now imagine I take on a five-man mortgage firm. This time, only one form goes to the FSA – how odd. Immediately the membership database is out of kilter, even though I’m regulating each and every adviser on a day-to-day basis. If I was a member of the public, I would now be dubious that someone in front of me was part of the regulatory process. Any protection it then affords me is questionable if I can’t see their name on an official site.

The answer to Mike’s question is simple – what process was followed to get authorised? Five forms = IFA, one form = mortgage broker. But the point of this letter is to say, does it matter, hence challenging the whole basis on which advisers register with the FSA. The fact that mortgage business is unlike investment business is immaterial. Pensions are not the same as investments either, but they’ve always been put together under a common regulatory framework. Extending that framework to take on mortgages/GI should have been an extension of a process that seemed to make sense to me.

If the FSA has various statutory objectives, one of which is “promoting public understanding of the financial system”, then what is the point of having a registration process where advisers within that system aren’t even named?

cussed or tried to negotiate with our panel of lenders any additional payments that may be hidden from what we disclose to the directly authorised community.

This also relates to any existing or new lender being part of our extensive whole-of-market panel. This position also applies to other service and lending organisations, such as Buildstore, Conti and Commercial First.

We understand the frustration and disappointment felt by the directly authorised community. Certain lenders would state that they have no control over your business placement, but suggest they may have over a principal who has appointed representatives. That is complete nonsense and all ARs would subscribe to that.

Tom, don’t give up, as I believe the DA sector is more important now to lenders than they thought 12 or 18 months ago.


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