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AIFA to examine impact of long stop absence on industry

  • 29/02/2012
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AIFA to examine impact of long stop absence on industry
The Association of Independent Financial Advisers (AIFA) has launched a campaign to help advisers protect against long-term liabilities.

Run in conjunction with provider Zurich, the campaign calls on the government to re-introduce a long stop in financial services.

The organisations will examine what impact the absence of a long stop – effectively a time limit on when consumers can complain – is having on the advice profession and on the attractiveness of firms to long term investment.

Latest available figures from the Financial Ombudsman Service show of the 123,089 complaints in 2008, just 1.7% would have been time-barred if a 15-year long stop was in place.

AIFA will be campaigning for the Financial Services Bill to introduce a long stop, or to give the new regulator, the Financial Conduct Authority, the ability to introduce it for the advice profession at a later date.

Chris Hannant, director of policy at AIFA, said the mitigation of liabilities in financial services was far behind other industries.

“The Financial Services Authority (FSA) has previously promised to review the need for a long stop. This must either happen now or we must have a firm instruction for the new regulator to undertake this review once it is formed.

“Consumers need and deserve a robust financial services community. To do that, firms must be able to quantify risk and exposure, to seek capital investment, and to do this a long-stop is necessary.”

Richard Howells, Zurich’s intermediary sales director, said it would be surveying advisers to present the findings to MPs.

“Support from advisers during this process will be vital. We need to ensure we have a strong and vibrant advice profession to service the needs of consumers. A formal limitation of liabilities would help deliver this.

“We’ll also explore other options available to advisers and how we, as an industry, can make these options more available and accessible to firms.”

Advisers can register their support and ask to be updated during the campaign HERE.

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