UK - Independent financial advisers will be fined and firms closed down if they give poor pensions advice, the Financial Services Authority's new chairman has warned.
Callum McCarthy – in his first speech as chairman – said the regulator would take a “tougher” stance on IFAs who did not give workers sound financial advice.
This will include preventing firms from conducting regulated business if they breach guidelines such as failing to comply with ombudsman awards and “not co-operating” with the FSA.
McCarthy – speaking at the Association of Independent Financial Advisers’ dinner – said: “We are pursuing means of separating sheep from goats – and making bad behaviour expensive.
“It is in the interest of all reputable IFAs that effective action is taken against any disreputable or irresponsible actions by an IFA. And there is no more important task in financial services than helping people make plans for their retirement.”
McCarthy said tighter controls were particularly important given the switch by many employers from DB to DC schemes. He said this forced individuals to make key decisions about their retirement, increasing the need for “responsible” advice.
“Far too many individuals are ill-equipped to make the decisions they are increasingly being asked to make.”
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