The number of formal FSA visits to small firms was down almost 90% in 2011/12 compared with the previous 12 months, figures obtained by a Freedom of Information (FoI) request show.
In the most recent period – from July last year to June this year – the regulator made just 34 visits to small firms. This compared with 262 visits made in the same period a year before.
The FSA did not explain the reason for the scale of the drop-off, though it said a project to replace Treating Customers Fairly (TCF) visits with a newer scheme called the Revised Approach to Small Firm Supervision (RASFS) may account for some it.
It added it had made some ad-hoc visits to firms as part of the project – visits which may not have shown up on the FoI figures – but that these have been relatively few.
The RASFS scheme is conducted regionally and may lead to three stages of FSA action: business risk awareness workshops; regulatory review processes; and, where necessary, follow-up visits to firms deemed to pose a risk.
Some advisers said the drop-off in visits may reflect the FSA’s changing view of the threat posed by small firms.
Carl Melvin managing director of Affluent Financial Planning, said: “It would be interesting to know whether [this] has been impacted by the FSA finding good practice in the advisory community, or recognising that small advisory firms pose less risk than larger firms.
“Alternatively, and more pessimistically, it could be a funding issue.
“However, the adviser roadshows [that are part of the Revised Approach] are having a positive impact. They are helpful and more personal, and they’ll increase the FSA’s understanding of [risks posed by] the advisory commununity.”
In numbers
The number of FSA visits to small firms as part of TCF project:
| Year | Q1 | Q2 | Q3 | Q4 |
| 2010 | 36 | 73 | 103 | 63 |
| 2011 | 64 | 32 | 0 | 0 |
| 2012 | 0 | – | – | – |
The number of FSA visits to small firms under the RASFS:
| Month 2012 | |
| Jan | 0 |
| Feb | 0 |
| March | 0 |
| April | 30 |
| May | 4 |
| June | 0 |
