FSA taking longer to authorise firms, says Threesixty

Issued: 09/02/2010 00:00:00

The time taken for the Financial Services Authority (FSA) to authorise new firms has almost doubled to about 14 weeks

The time taken for the Financial Services Authority (FSA) to authorise new firms has almost doubled to about 14 weeks, according to Threesixty.

Advisers can face long waits for authorisations as the regulator deals with a series of issues, said Threesixty partner Russell Facer (pictured).

The delays have grown as the FSA stepped up its checks and changed the way staff handled applications, said Facer. The FSA approvals team also has to cope with the sale and rent-back and payment services firms which have recently become regulated.

"Primarily it is a new regulation that brought a lot more firms into the FSA’s remit," said Facer. "Most recently you are looking at 13 to 14 weeks…take it back to the mid part of 2008 and it was nine weeks…but it all depends on the firm."

Networks agreed with Threesixty that it was taking the FSA longer to tackle approvals. The time taken for the FSA to approve advisers switching network had grown to five to seven days from around three days over the last three months, according to Tenet.

"There is a lot activity in the market leading to an impact on the number of applications," said Keith Richards, Tenet distribution and development director. Whitechurch managing director Ian McIvor said Park Row, Mortgage Times and now Alpha 2 Omega faced delays switching networks.

The FSA is legally obliged to tackle approval requests within six months but can send back cases it considers incomplete and restart the clock. "It is a huge problem…in 10 to 12 weeks we did not even get a case officer assigned," said one experienced adviser applying for authorisation for a new firm. "They have six months to do it legally and I can see it taking that long."

The FSA was looking to recruit more staff into its approvals team to cope with the increased volume of work, according to Facer.

The FSA said its more intrusive approach had led to delays. "We do have a high volume of cases arising but we are well within our statutory requirements," said an FSA spokeswoman. "I know they are making changes to speed things…it has slowed initially but we hope it will speed up."

Source: Iain Martin, Citywire, 9th February 2010