MPs have criticised the City regulator for its "peremptory" rejection of its plea to postpone reform of the financial advice market.
Andrew Tyrie, chairman of the Treasury Select Committee, complained to Financial Services Authority chief executive Hector Sants that it had rejected its findings “in a peremptory manner” hours after the report was distributed.
The FSA had said that it planned to go ahead with implementing its retail distribution review (RDR) from 2013, despite the committee’s call for a 12-month delay.
Mr Tyrie said: “We deprecate the authority’s actions. It was precipitate, giving the impression that no adequate consideration had been given to the arguments for the delay we recommend. This is unacceptable.”
Mr Sants said its response was not intended to be seen as a “peremptory rejection” of any element of the committee’s report.
“Rather, it was intended simply to ensure that the momentum behind the preparation for RDR is not lost,” he said.
The financial sector is divided over the benefits of reform.
In recent years many financial advisers have taken higher level qualifications and moved to a model where they agree remuneration with their clients rather than taking commission from providers.
A number of them hope that a ban on commission paid directly from product providers and a more highly qualified adviser base will boost the image of the sector.
But some have warned that a number of advisers will be forced to quit the industry, reducing provision of advice to investors. Under the new rules, from 2013 advisers will have to hold qualifications equivalent to the first year of a university course.
The FSA hopes that reform will improve the quality of advice given to clients.
It calculates that mis-sold personal pension and endowment policies alone have led to nearly £15 billion being paid in compensation.
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