26Feb

BTL Mortgages to Face New Regulation

Plans drawn up to bring BTL mortgages under FCA regulation

Firms selling buy-to-let (BTL) mortgages will soon have to operate under a new regulatory regime. At present, these types of mortgages are essentially unregulated, unless the borrower intends to use more than 40% of the property as their residence.

However, as with residential first and second charge mortgages, the regulatory landscape for BTL mortgages will change as a result of the European Union’s Mortgage Credit Directive. EU member states are faced with the choice of either applying the Directive to BTL mortgages, or else putting in place an appropriate alternative regulatory system. The UK has chosen to take the latter course of action, and hence financial regulator the Financial Conduct Authority (FCA) issued a consultation paper in early February 2015 on how it plans to regulate the BTL market.

Under these proposals, firms operating in the BTL market (including lenders, brokers and administrators) will need to register with the FCA, although strictly speaking they will not be ‘authorised’ by the financial watchdog. Firms already regulated by the FCA for other activities are expected to be able to follow a simple registration process, which might consist of little more than informing the FCA they intend to carry out BTL activity. BTL firms that are new to FCA regulation will be expected to provide information about the firm’s key personnel, and their criminal records, disciplinary records and skills and competence.

Applications for BTL registration can be considered by the FCA from September 2015 onwards. Initial registration fees are expected to be £500 or less (£100 or less for firms already authorised by the FCA), while periodic registration fees are not expected to exceed £500 for lenders or £250 for intermediaries.

Once registered, firms will be subject to a risk-based supervision programme by the FCA. The conduct standards for BTL firms will include requirements relating to areas such as:

  • Provision of information to clients
  • Verification of information supplied by clients
  • Creditworthiness assessments
  • Training and competence
  • Calculation of Annual Percentage Rates
  • Treatment of clients in arrears

The FCA will have the power to take enforcement action against BTL firms.

Registered BTL firms will need to complete data returns and submit these to the FCA, but the requirements are expected to be less onerous than those of the existing Mortgage Lenders and Administrators Return (MLAR) which authorised mortgage firms need to complete.

Complaints about BTL mortgages will also come under the jurisdiction of the Financial Ombudsman Service for the first time, with BTL firms expected to pay the same case fee as other firms, i.e. £550 per case once the allowance of 25 free cases per year has been exhausted.

Regardless of the EU’s Directive, with the size of the BTL market having grown by a quarter in both 2013 and 2014, many will feel that the introduction of regulation to the BTL sector is highly desirable.

A consultation on the proposed changes has commenced, and firms are invited to submit their views prior to March 19 2015. The new BTL regime is expected to commence on March 21 2016.

The proposed changes will only affect residential BTL mortgages – commercial BTL mortgages will remain unregulated.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

23Feb

Long Stop for Complaints Back on Agenda

Adviser trade body head says long stop back on agenda

The head of a financial advisers’ trade association has revealed that he is to meet with the regulator, the Financial Conduct Authority (FCA), to discuss the possible introduction of a ‘long stop’ – an overriding time limit on when complaints can be considered.

At present, the Financial Ombudsman Service can consider any complaint made within three years of the point at which the client should reasonably have realised there was an issue. This applies even if the client realises there is a problem with their financial product some 20 years or more after the sale. Supporters of this open-ended timescale point to the fact that many financial products are long-term commitments, and that for example a pension plan may be held for 40 years or more before benefits are taken.

The Association of Professional Financial Advisers (APFA) has campaigned for an over-riding time limit for some time, under which complaints could not be considered once 15 years had elapsed since the advice given. The authorities appeared to have little time for their arguments, until suddenly the FCA’s annual business plan, published in March 2014, promised to look at this issue.

APFA director general Chris Hannant will lead a delegation from the Association which will meet with the FCA before the end of February 2015. APFA has already made its case in writing, in which it suggests that consumers would benefit from the long stop.

Many experts would support the long stop precisely because it provides consumer protection, i.e. whenever a client realises they have a problem with a financial product, they can make a complaint and receive any compensation due. However, APFA has argued that the lack of a long stop is disadvantaging consumers by driving up costs of advice – firms are seeing significant rises in the costs of professional indemnity insurance, and these costs are being passed on to the firms’ clients – and by reducing choice in the market as advisory firms stop trading.

APFA also raised the issue of advisers who retired many years ago suddenly being confronted with a complaint about them. Its submission reads:

“One in six people over the age of 80 have dementia. Most people would recognise that the majority of over 80s would no longer be capable of dealing with a complaint, and in any event should not be expected to have to. Some might argue therefore that subjecting individuals to such treatment is an abuse of power by the regulator.”

Other arguments made by the Association include that the lack of a long stop is hindering investment in the advisory sector, and that other European countries such as Austria, Belgium and France have a long stop.

Earlier suggestions that the European Union’s Alternative Dispute Resolution Directive would prevent a long stop being introduced in the UK have now been dismissed.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

20Feb

Personal Insolvencies at 9 Year Low

Personal insolvencies at nine year low

The Insolvency Service has revealed that personal insolvencies in England and Wales in 2014 totalled 99,196, which represents a 1.8% fall from 2013. This is the lowest figure for nine years and the fourth successive year in which the figure has fallen.

It thus seems that the second quarter of 2014 may have been something of an anomaly. This quarter saw a rise of 5.1% in personal insolvency events when compared to the same period in 2013.

Bankruptcies accounted for just 20,318 of the insolvency events, representing a fall of 18.3% compared to the previous year. This is the lowest number of bankruptcies the UK has experienced since 1998.

The number of debt relief orders entered into fell by 3.1% to 26,688.

However, the number of Individual Voluntary Arrangements (IVAs) that were taken out in 2014 bucked the trend. The figure for this type of arrangement of 52,190 represents a 6.8% annual increase. IVAs thus accounted for the majority (53%) of insolvency events in 2014.

A DRO allows those with debts of up to £15,000 and assets of £300 or less and disposable income of £50 per month or less to have their debts and interest frozen for 12 months, and to have their debts written off if their financial position has not improved by the end of this period.

An IVA is where creditors representing at least 75% of an individual’s debt agree to an arrangement whereby the individual’s debts are restructured, on the basis that only a certain percentage of the debt needs to be repaid. It is administered by an insolvency practitioner.

In January 2015, the Government announced plans to increase the bankruptcy threshold to £5,000. At present, individuals can be the subject of a bankruptcy petition over debts as small as £750, with this threshold having remained unchanged since 1986.

At the same time, the requirements for entering into a DRO will be relaxed. The maximum debt that can be covered under a DRO will rise from £15,000 to £20,000; and the maximum value of assets that a DRO holder can have will rise from £300 to £1,000. If the individual owns a vehicle of up to £1,000 in value, then this does not need to be included in the asset limit. The requirement for DRO holders to have no more than £50 per month of income left after essential expenses have been accounted for is expected to remain unchanged.

The Government estimates that 3,600 more people will be able to enter a DRO each year as a result of the changes. It is estimated that the proposals will become law in October 2015.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

20Feb

Personal insolvencies at nine year low

The Insolvency Service has revealed that personal insolvencies in England and Wales in 2014 totalled 99,196, which represents a 1.8% fall from 2013. This is the lowest figure for nine years and the fourth successive year in which the figure has fallen.

It thus seems that the second quarter of 2014 may have been something of an anomaly. This quarter saw a rise of 5.1% in personal insolvency events when compared to the same period in 2013.

Bankruptcies accounted for just 20,318 of the insolvency events, representing a fall of 18.3% compared to the previous year. This is the lowest number of bankruptcies the UK has experienced since 1998.

The number of debt relief orders entered into fell by 3.1% to 26,688.

However, the number of Individual Voluntary Arrangements (IVAs) that were taken out in 2014 bucked the trend. The figure for this type of arrangement of 52,190 represents a 6.8% annual increase. IVAs thus accounted for the majority (53%) of insolvency events in 2014.

A DRO allows those with debts of up to £15,000 and assets of £300 or less and disposable income of £50 per month or less to have their debts and interest frozen for 12 months, and to have their debts written off if their financial position has not improved by the end of this period.

An IVA is where creditors representing at least 75% of an individual’s debt agree to an arrangement whereby the individual’s debts are restructured, on the basis that only a certain percentage of the debt needs to be repaid. It is administered by an insolvency practitioner.

In January 2015, the Government announced plans to increase the bankruptcy threshold to £5,000. At present, individuals can be the subject of a bankruptcy petition over debts as small as £750, with this threshold having remained unchanged since 1986.
At the same time, the requirements for entering into a DRO will be relaxed. The maximum debt that can be covered under a DRO will rise from £15,000 to £20,000; and the maximum value of assets that a DRO holder can have will rise from £300 to £1,000. If the individual owns a vehicle of up to £1,000 in value, then this does not need to be included in the asset limit. The requirement for DRO holders to have no more than £50 per month of income left after essential expenses have been accounted for is expected to remain unchanged.
The Government estimates that 3,600 more people will be able to enter a DRO each year as a result of the changes. It is estimated that the proposals will become law in October 2015.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

18Feb

Plans drawn up to bring BTL mortgages under FCA regulation

Firms selling buy-to-let (BTL) mortgages will soon have to operate under a new regulatory regime. At present, these types of mortgages are essentially unregulated, unless the borrower intends to use more than 40% of the property as their residence.

However, as with residential first and second charge mortgages, the regulatory landscape for BTL mortgages will change as a result of the European Union’s Mortgage Credit Directive. EU member states are faced with the choice of either applying the Directive to BTL mortgages, or else putting in place an appropriate alternative regulatory system. The UK has chosen to take the latter course of action, and hence financial regulator the Financial Conduct Authority (FCA) issued a consultation paper in early February 2015 on how it plans to regulate the BTL market.

Under these proposals, firms operating in the BTL market (including lenders, brokers and administrators) will need to register with the FCA, although strictly speaking they will not be ‘authorised’ by the financial watchdog. Firms already regulated by the FCA for other activities are expected to be able to follow a simple registration process, which might consist of little more than informing the FCA they intend to carry out BTL activity. BTL firms that are new to FCA regulation will be expected to provide information about the firm’s key personnel, and their criminal records, disciplinary records and skills and competence.

Applications for BTL registration can be considered by the FCA from September 2015 onwards. Initial registration fees are expected to be £500 or less (£100 or less for firms already authorised by the FCA), while periodic registration fees are not expected to exceed £500 for lenders or £250 for intermediaries.

Once registered, firms will be subject to a risk-based supervision programme by the FCA. The conduct standards for BTL firms will include requirements relating to areas such as:

• Provision of information to clients
• Verification of information supplied by clients
• Creditworthiness assessments
• Training and competence
• Calculation of Annual Percentage Rates
• Treatment of clients in arrears

The FCA will have the power to take enforcement action against BTL firms.

Registered BTL firms will need to complete data returns and submit these to the FCA, but the requirements are expected to be less onerous than those of the existing Mortgage Lenders and Administrators Return (MLAR) which authorised mortgage firms need to complete.

Complaints about BTL mortgages will also come under the jurisdiction of the Financial Ombudsman Service for the first time, with BTL firms expected to pay the same case fee as other firms, i.e. £550 per case once the allowance of 25 free cases per year has been exhausted.

Regardless of the EU’s Directive, with the size of the BTL market having grown by a quarter in both 2013 and 2014, many will feel that the introduction of regulation to the BTL sector is highly desirable.

A consultation on the proposed changes has commenced, and firms are invited to submit their views prior to March 19 2015. The new BTL regime is expected to commence on March 21 2016.

The proposed changes will only affect residential BTL mortgages – commercial BTL mortgages will remain unregulated.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

17Feb

Additional Funds Set Aside for Compensation Claims

Santander sets aside additional sums for PPI and investment compensation

In February 2015, high street bank Santander announced that it had set aside £45 million to pay investment compensation claims. This follows the £12,377,800 fine the bank received from the regulator, the Financial Conduct Authority (FCA), in March 2014 for investment mis-selling. As part of the settlement with the FCA on this occasion, Santander was required to offer compensation to affected customers.

The failings came to light after an FCA mystery shopping exercise. Many customers, sometimes vulnerable and elderly, were recommended risky investments that may not have been suitable for their circumstances, attitude to risk or capacity for loss. In other cases, Santander failed to provide ongoing services that it had agreed to provide, and for which it was receiving payments from the customer. Further deficiencies were uncovered with the standard of training given to advisers. The problems persisted for three years, from the start of 2010 to the end of 2012.

Issues were also identified regarding Santander’s financial promotions, which incorrectly suggested that customers could receive a bespoke investment management service.

The FCA also commented that Santander had misled them as to the findings of an independent review it commissioned. When an external consultant reviewed 50 investment sales from the first half of 2011, 42% of these were found to be potentially unsuitable. Yet Santander still told the FCA appropriate advice was being given to “the great majority of customers”. 

At the time, FCA director of enforcement and financial crime Tracey McDermott said of the bank’s actions:

“Customers trusted Santander to help them manage their money wisely, but it failed to live up to that responsibility.

“If trust in financial services is going to be restored, which it must be, then customers need to be confident that those advising them understand, and are driven by, what they need. Santander let its customers down badly.”

Santander stopped offering investment advice to its customers in March 2013, although it has since launched a new advice service for clients with more than £50,000 to invest.

All authorised firms need to take account of some of the issues uncovered. Clients should not be advised to effect a particular investment without a comprehensive analysis of their income, expenditure, assets, age, level of investment knowledge, risk profile and capacity for loss. Those giving advice need to be competent to do so. Financial promotions must meet the ‘clear, fair and not misleading’ test. Finally, firms must be open and honest in their dealings with the FCA.

In February, Santander also announced that it had set aside an additional £95 million for payment protection insurance (PPI) compensation, saying that “claims are expected to continue for longer than originally anticipated.” Based on previous reports, this would take the bank’s total PPI compensation reserve to £846 million.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

15Feb

No further action against Wonga over Fake Letters

Wonga avoids police investigation into fake letters

In June 2014, payday lender Wonga announced that it had reached agreement with the regulator, the Financial Conduct Authority (FCA), to compensate around 45,000 customers for the ‘distress and inconvenience’ caused by sending them debt collection letters which purported to come from law firms, firms which in fact did not exist. All affected customers would receive a £50 payment, with higher amounts being awarded in special circumstances.

It now seems that no further action will be taken against Wonga. It was suggested that the firm’s actions amounted to attempting to obtain money by deception, and other legal experts suggested they may be guilty of ‘impersonating a solicitor’, but in February 2015, City of London Police announced that they did not believe there was sufficient evidence against the firm to justify criminal charges. In its statement, the Police commented that most of the letters did contain a reference to Wonga in the small print at the foot of the page.

Wonga’s letters were sent between autumn 2008 and late 2010, and claimed to be from law firms such as ‘Chainey, D’Amato & Shannon’ and ‘Barker and Lowe Legal Recoveries’, when they were in fact from Wonga’s in-house debt collection team.

In mid-November 2014, the firm admitted that only just over half of the affected customers had received their compensation. Appearing before the House of Commons’ Treasury Select Committee (TSC), Wonga’s chief credit officer, Nick Brookes, said only 27,000 offers of compensation had so far been sent. Of the 5,000 who had already responded, 99% had accepted their offer. Mr Brookes suggested that many customers had changed their contact details and were proving difficult to trace.

Regarding the fact that less than 20% of those who had received the letters had replied, Joanna Elson, chief executive of financial charity the Money Advice Trust, suggested that many people were scared to open letters from Wonga, fearing that the communication may instead be another attempt to recover unpaid debts.

As of February 2015, it is understood that around three quarters of the compensation offer letters have now been sent.

High street banks Halifax and NatWest are amongst the other firms reported to have used similar tactics to try and recover debts. However, one crucial difference here is that the law firm names used in the banks’ letters were actually real subsidiaries of the banking group, whereas the firms Wonga’s letters referred to were fictitious.

Whilst no further action is likely to be taken against Wonga over this matter, payday lenders remain subject to intensive monitoring by the FCA. The FCA will also get to scrutinise all of the UK’s payday lenders in the near future when it considers their application to upgrade from limited permission to full permission. All such applications from payday lenders need to be submitted by the end of February 2015.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

13Feb

FCA Refuses Credit Application

FCA refuses credit application over convictions and lack of competence

The Final Notice published by the Financial Conduct Authority (FCA) on January 30 2015 provides an excellent example of the reasons as to why an authorisation application may be declined. The unsuccessful applicant, who is not named in the Notice, was refused authorisation to operate a debt management firm due to a previous criminal conviction, and due to the lack of skills and knowledge demonstrated in his application.

The individual was convicted of a criminal offence in 2011, and at the time of his application, was still serving his sentence for that offence, however he still failed to disclose the existence of this conviction on his application form. The FCA says that he did not offer any explanation for answering No to the question “Have you…ever been convicted of any offence…?”

The nature of the offence is not stated in the Notice. However, it appears to be an offence which makes the FCA concerned about the possibility of the individual holding face-to-face meetings with potentially vulnerable customers, meetings which could take place within his home as he did not intend to use any other business premises. The individual was planning to operate his business single-handedly, without any employees to whom he could delegate sensitive duties.

The undisclosed conviction may on its own have constituted sufficient grounds for refusing the application, on the basis that the individual is not ‘fit and proper’. Yet his application also demonstrated a lack of knowledge of financial services.

The applicant has worked in the industry before, but not in the last few years. He has not undertaken any training in recent months to update his knowledge.

The complaints procedure submitted by the individual gave rise to particular concern. This procedure named the Office of Fair Trading (OFT) as a body to which complaints can be made. At the time of the application, the OFT was still the consumer credit regulator, however neither the OFT nor the FCA has any role in investigating complaints about firms, and the applicant seemed unaware of the Financial Ombudsman Service (FOS) and the role it fulfils. The FOS was also not mentioned in the terms & conditions document submitted with the application.

Another area of concern was that the firm’s intended procedures regarding handling of payments received from clients may have breached the Unfair Terms in Consumer Contracts Regulations 1999.

The applicant also seemed unaware of which legislation covered customers’ cancellation rights on distance contracts, believing this to be the Consumer Protection (Distance Selling) Regulations 2000, as opposed to the Financial Services (Distance Marketing) Regulations 2004.

The FCA also adds that his compliance procedures were misleading, making reference to staff and departments within the firm carrying out certain duties, when in fact he was intending to operate as a sole trader.
All applicant firms must satisfy the FCA that they meet its Threshold Conditions – a set of basic requirements all regulated firms must meet. The conditions to be satisfied include the need to be ‘fit & proper’. A fit and proper assessment for a firm may cover areas such as: any previous dealings with regulators; the quality of internal systems & controls; the skill levels present within the organisation; and the financial crime risk posed.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

12Feb

Consumer Spotlight: FCA Online Tool

FCA consumer segmentation model allows customers to be classified

The Financial Conduct Authority (FCA) has developed an online tool known as Consumer Spotlight. This tool classifies the UK’s consumers into 10 separate groups, which are:

  • Retired with resources – usually homeowners, members of this group are financially savvy, with a high level of savings and little debt. They are usually risk averse when it comes to investment.
  • Retired on a budget – have a low income and are careful about spending any of their limited funds
  • Affluent and ambitious – usually in the 35-60 age group, highly educated and earning high incomes. They are confident about making financial decisions
  • Mature and savvy – have above average levels of income and savings, and have a good knowledge of financial matters
  • Living for now – earning a low income. Not confident with financial matters, but prepared to take more risks than the average person. They are also computer literate and make regular use of the internet
  • Striving and supporting – on a low income and struggling to meet regular outgoings. The majority of this group have dependent children. Generally risk averse
  • Starting out – highly educated, but with a below average income. Comfortable with technology. Almost all members of this group are under 45, single with no dependants, and rent their home
  • Hard pressed – earning a low income, struggling to pay bills, not confident financially and may have no savings at all
  • Stretched but resourceful – homeowners who are confident about financial matters but who are busy people and are pressed for time
  • Busy achievers – high earners who have mortgages, savings and their own pension arrangements

The group with the highest number of people is ‘living for now’, which represents 16.1% of those surveyed. The second most populous group is ‘retired with resources’ (13.3%) and the group with the lowest number of people is ‘mature and savvy’ (4.2%).

The reason this model was developed is that the FCA has an operational objective to secure an appropriate degree of protection for consumers, and that in order to do this it needs to understand the risks different types of consumers face.

The model was compiled following extensive research by marketing agency TNS BMRB, who interviewed over 4,000 people. Additional data was also provided by credit reference agency Experian.

The FCA principally uses Consumer Spotlight to determine which types of customers purchase which financial products. However, a more specialised example of the way it uses the tool is to determine which consumer groups are more vulnerable to scams and swindles.

Firms are also welcome to use Consumer Spotlight. It allows firms to discover which characteristics, attitudes and behaviours people in different groups display, which could assist with product design, with deciding who to market products to and with the nature and style of marketing communications.

The dedicated Consumer Spotlight website at www.fca-consumer-spotlight.org.uk allows users to segment the data in multiple ways. Examples of the information that can be gained from the tool include:

  • Of those aged 25 to 44 with household income of between £25,000 and £50,000, the most common categories are stretched but resourceful (22% of people meeting these criteria) and living for now (17%).
  • Men are much more likely to fall into the affluent and ambitious category (63.9% of this group are men), while 70.8% of busy achievers are women
  • 96.2% of the busy achievers group have access to the internet, compared to only 36.6% of the retired on a budget group
  • 31.6% of the living for now group have no personal/occupational pension provision, whereas all those surveyed in the affluent and ambitious and busy achievers groups have made some form of provision
  • Of those behind with loan or credit commitments, 12.2% were in the hard pressed group, and only 0.7% in the stretched but resourceful group

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

11Feb

FCA issue statement about applying rules retrospectively

FCA issues feedback on retrospective regulation consultation

In January 2015, the Financial Conduct Authority (FCA) issued a feedback statement in which it asserted that, contrary to some people’s opinions, it did not believe it had applied any rules retrospectively.

As the regulator, the FCA is entitled to change its mind, and to issue new rules and guidance. However, it is clearly not fair to then hold firms accountable for their actions before these changes were made, if the firms were indeed acting in accordance with the FCA’s rules, principles and guidance available at the time.

Back in August 2014, the FCA asked firms to provide examples of when they believed rules may have been applied retrospectively, by either the FCA or its predecessor the Financial Services Authority (FSA). 36 responses were received, but the FCA is apparently not convinced by any of the examples given in these replies.

Some firms have said in the past that they believe the regulator ‘moved the goalposts’ in areas such as:

  • Whether the design of single premium payment protection insurance policies breached the Treating Customers Fairly principle
  • The FSA’s statement in July 2011 that it believed traded life policies were ‘toxic’, after the products had already been on the market for some time
  • Issues regarding mis-selling scandals such as pensions, endowments and interest rate hedging products

Some mortgage lenders have cited a fear of subsequent retrospective regulation as a reason for not allowing customers trapped on poor mortgage deals (the so-called ‘mortgage prisoners’) to re-mortgage to a better deal without having to go through the usual stringent affordability assessment.

The FCA recognises however that most of its supervision activities concern events that have already occurred, and suggests that this could give rise to perceptions of retrospective regulation. This may occur for example when the regulator uncovers concerns about the advice given by a firm over a period of time and commissions a historical business review. The FCA is striving to become a more forward-looking regulator and to intervene at an early stage where it suspects that issues may arise.

Some advisers and industry commentators however believe that the real problem with retrospective regulation lies with the Financial Ombudsman Service (FOS). Officially, the FOS is not a regulator, and its role is confined to adjudicating on complaints made about financial firms.  However, the FOS uses a very generic test of whether it believes the firm’s actions were ‘fair and reasonable’, and clearly this will always be a subjective judgement.

Simon Webster, managing director of Kent-based advisory firm Facts and Figures Financial Planning, said:

“It may not be the case that the FCA does retrospective regulation but FOS does and it remains an issue for all financial advisers.”

Simon Mansell of Worcester-based Temple Bar Independent Financial Advice, suggested the FCA was operating “above the law.”

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

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