In today’s Treasury Select Committee (TSC) public evidence hearing on RDR, Sants said he has “sympathy” with advisers calling for the reintroduction of an industry long-stop and said the regulator will examine the issue again.
“I have sympathy with the argument,” he said. “If the committee recommends we take another look we might do so.”
The FSA chief executive said when the issue was last examined in 2007 there was a lack of “compelling evidence” to force a rethink but admitted the lack of a long-stop is a source of grievance for small firms.
“This is an interesting area – not necessarily specific to RDR – but about a whole series of issues.”
He added other industries have a long-stop and he can understand the viewpoint of those asking why the adviser industry does not have recourse to a time limit on complaints.
The FSA chief’s comments come in the wake of Mortgage Solutions sister title IFAonline revealing Adviser Alliance is steaming ahead with plans to launch a judicial review into the lack of a long-stop after an IFA lost a case relating to a 20-year claim.
A long-stop – meaning the matter complained about must have occurred within the last 15 years or the complaint is void – was introduced in 1980. Adviser Alliance says the FSA removed it, without consultation, in 2001.
The TSC collected 203 submissions on the RDR from IFAs, providers and trade bodies, with many respondents expressing concern over areas including the lack of long-stop.
