Financial Services Authority 'bought off by big business', fails to face up to scandal

The Financial Services Authority, one of the pack of 'less than genuine or fully independent' UK regulators, comes in for attack after failing to properly address product salesmen on commission who call themselves 'independent financial advisers'.

Perhaps the FSA didn't want to upset the business as some of it's staff may be looking for jobs in the sector later on ...

The Herald reports :

FSA criticised over advisers’ independence

MARK SMITH, Deputy Business Editor

The Financial Services Authority yesterday came under fire after the influential UK Shareholders Association said it rejected the conclusions of the City watchdog over the so-called independence of independent financial advisors.

In its response to an FSA enquiry earlier this year, UKSA yesterday said that the watchdog "once again fails to face up to the scandal of a system where product salesmen on commission are allowed to describe themselves as independent financial advisers.

"This allows a vast range of expensive and unsuitable financial products to be sold to people who are unaware that what they thought was advice was in fact a selling process."

The FSA has frequently attempted to tackle the problem that consumers appear unwilling to pay for good independent financial advice.

However, UKSA said the emphasis on financial products created by insurance companies and investment institutions within its review is a mistake.

A spokesman said: "The aim should be to help individuals to understand the basic principles of personal financial management, through advice, education and self-help.

"Only by this means can the consumer be put in a position to evaluate whether a product meets his needs."

Earlier this year, Otto Thoresen, chief executive of Aegon UK, was asked by the Treasury to report on how a "generic advice" service might work. His findings are due next year.

An interim report, published in October, emphasises that a widely-available money guidance service should be available for all and "nobody should be turned away", although there should be effective targeting of those most vulnerable to the consequences of poor financial decision-making.

UKSA added that the Thoresen review "continues down this path" but that if the solutions of FSA report "are accepted, the opportunity will have been thrown away"