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FSA defends ex-Honister reauthorisation record

  • 03/09/2012
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FSA defends ex-Honister reauthorisation record
The Financial Services Authority (FSA) insists that it has reauthorised the vast majority of ex-Honister advisers who applied within its voluntary time frame, despite concerns among some advisers that the process has been slower than promised.

Some 776 advisers were de-authorised when Honister Capital was put into administration in June this year.

Of those 776, just 296 applications to be advisers/appointed representatives were received.

The organisation has said that 75% of these applications had been processed according to its voluntary time frame up until the 22 August.

The time frame allows five days for a customer function (CF30) approval and ten days for a significant influence function.

This figure falls just short of the voluntary target for completing applications which is 85%.

In addition, the FSA has had just 18 applications for direct authorisation from ex-Honister appointed representatives. 

Two were submitted before Honister went into administration and have been authorised since. The other 16 are in progress.

The FSA reiterated the fact that the service level agreement for direct authorisation is six months for a complete application and 12 months for an incomplete application.

It is not known why so few ex-Honister advisers have applied for re-authorisation in the three months since the company went into administration.

A spokesperson from the FSA said: “The time it takes to determine an application depends greatly on the level of due diligence carried out by the authorised firm or principal (for an appointed representative) before submitting an application, as well as the quality of the application itself. If due diligence is lacking, or if information is missing or submitted late, the application will take longer.

“We have been working hard to authorise individuals previously involved with Honister as quickly as possible. For the period in question 75% of these applications have been completed within either five days (for customer functions) or ten days (for significant influence functions).

“While the time taken for this particular group is lower than the voluntary service standard we aim to meet we are on track to meet that benchmark for all applications. As a point of reference, in July alone we received over 2,900 applications for approval.”

One ex-Honister adviser, who did not want to be named, said: “I applied to be AR at True Potential, this took 20 days but I am reauthorised now. I expect the extra delay was the result of request for information related to pension transfers.”

He added: “It is interesting that so few ex-Honister advisers have applied for reauthorisation – perhaps they had exposure to Arch Cru, or alternatively maybe they haven’t achieved the necessary qualifications.”

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