Davy says the requirement is an example of “top-heavy” regulation. He says: “As it stands, the statement will have to be obtained every year. I would not mind every 10 years, possibly every five, but every single year is frankly ridiculous. It is an example of a top-heavy regulatory structure that should have the axe taken to it.”
Davy also hits out at the FSA’s definition of independent advice, claiming the requirement for advisers to consider the whole investment market pushes them towards risky product areas.
He says: “It is ridiculous. The FSA is driving advisers towards considering unregulated investments and other risky product areas. If someone is classed as independent, they are, under the law of agency, acting for their client. That is a straightforward definition.
“It is nonsensical of the FSA to try to redefine the English language. It is moving away from reality and making regulation far more laborious for advisers at a time when we need more, not fewer, of them.”
Tom Kean, the director at Thameside Wealth Management, says: “It is not the case that advisers will have to recommend all types of investments to remain independent. Advisers will simply have to research all types of investments and state if there are any they do not think are suitable for their clients.”