Advisers have attacked the proposed abolition of the approved persons regime as a “knee-jerk” reaction which could prove expensive at a time when regulatory costs are spiralling.
On Monday, Chancellor George Osborne unveiled plans to replace the “failed” approved persons regime with a senior persons regime and licensing system for all regulated financial services staff.
The parliamentary commission on banking standards recommended the move for the banking sector but the Government says it is simpler to change the entire financial services regime.
The FCA is expected to introduce transitional arrangements with reforms primarily targeted at banks. There are no estimates yet on costs or time frames.
A Treasury spokesman says: “There will be no change in the arrangements for authorising firms and no firm will need to seek re-authorisation as a result of the reforms.”
FCA chair John Griffith-Jones has welcomed the new regime and the FCA says it will produce a detailed response in the autumn.
Lansons Communications director Richard Hobbs says: “This change for advisers is a waste of money. The FCA register will need to be started again so it will take a minimum of two years and everyone will have to foot the bill.”
Association of Mortgage Intermediaries chief executive Robert Sinclair says: “It is an incredibly unhelpful decision and all I can see is extra costs.”
Worldwide Financial Planning IFA Nick McBreen says: “This is a nightmare and ridiculous overkill. Sort out the banks but don’t mess around with the IFA sector when you don’t need to.”
Yellowtail Financial Planning managing director Dennis Hall says: “Firms of my size are punch drunk with all the changes. This is another knee-jerk reaction.”
This month, the FCA confirmed advisers in the A13 fee block are being hit with a 16 per cent hike in regulatory fees for 2013/14 to £38.1m, up from £32.8m in 2012/13.
The FSCS has also announced changes to its funding model, from next April, which would have seen investment advisers hit with a maximum levy of £150m for 2013/14 instead of the £78m actually levied on them under the current model.