IFAs join forces to lobby new MPs on "poor" regulation

Issued: 20/05/2010 00:00:00

Hundreds of advisers are gearing up to lobby their new MPs about years of “poor” regulation in what could represent one of the biggest “joined-up” challenges to the FSA

IFA support group Tenet says growing numbers of member firms are ready to launch a co-ordinated bid to detail to the new government how the FSA is "failing" to protect good businesses.

The company is producing what it calls a "lobbying library" to help members contact and communicate effectively with the record number of new MPs in the David Cameron-led coalition government.

The website will include template letters and advice on how best to lobby MPs and Tenet says the next few months represent a "crucial" time for IFAs to begin doing so.

According to Tenet, while aspects of the RDR continue to anger many advisers, it was the £58m FSCS interim levy following several high-profile investment failures last year that proved a "tipping point" in uniting firms against the FSA.

Today, Chancellor George Osborne refused to confirm Tory plans to scrap the FSA were completely off the agenda as the Government unveiled its first five-year policy plan.

This is despite comments last July when, as shadow Chancellor, Osborne said a Conservative government would abolish the FSA and hand regulation back to the Bank of England.

"The general and growing view is that regulation is ultimately delivering poorer consumer outcomes as it simply focuses on driving out bad practice, with little, if any regard for the impact on good practice,” group distribution and development director Keith Richards says.

"Individuals want to play their part and one way to do that is to lobby their respective MPs to help increase awareness amongst politicians."

Public opposition to a number of FSA decisions, like the FSCS levy, has been growing in recent weeks following the emergence of lobby groups such as Adviser Alliance and the activities of financial services law firm Regulatory Legal. The Association of IFAs (AIFA) also opposed the levy.

But Tenet says a number of advisers, despite sharing the sentiments of their peers, have suffered in silence because of the "fragmented" nature of the challenges.

Earlier this year, the FSCS indicated it would need to charge an additional £58m levy to cover the compensation costs arising from the collapse of Keydata Investment Services, Pacific Continental Securities and Square Mile Securities.

The levy has been imposed on the investment intermediation sub-class despite Keydata apparently marketing itself as a product provider.

"The feeling of unfairness about the levy alone has been enough for firms to begin talking about lobbying their MPs," Richards says.

"Advisers want to play their part now. The different groups claiming to battle on behalf of IFAs are usually led by people who cannot get an audience with the FSA or the Government."

Source: Scott Sinclair, Professional Adviser, 20th May 2010