The Association of Independent Financial Advisers (AIFA) has called for the Financial Services Authority (FSA) to be aware of the negative impact of intervention.
Stephen Gay, director general of AIFA, says: “The FSA’s recent warning on the life settlement class has already forced one fund to close.
“This has caused real consumer detriment and may, in fact, have harmed the very people they are seeking to protect.”
Gay says there must be a review to establish if the closure would have happened regardless or if it was a direct consequence of intervention.
He says: “This demonstration of the regulator’s increasingly interventionist approach does raise more general concerns about the impact it will have on the market in future.
“If the regulator is to have significant product intervention powers, it is vital we know how they will work in practice and how they will assess the impact.”
Gay adds: “The system of accountability for the regulator has relied on internal self-assessment with the result that there have been few external effective checks and balances in place. The FSA must be much more accountable for its actions.”
To receive more relevant articles like this one, why not sign up to our briefings and breaking alerts by clicking here.