FSA accused of ‘network nonsense’
The intermediary in question said: “As a small, directly authorised mortgage intermediary with two appointed representatives (ARs), we thought it would be prudent to check on what might cause us to become a network.
The FSA Handbook glossary gives two conditions, so I called the small firms contact line and asked. The reply was definite – we would not become a network just because the numbers of advisers in our ARs exceeded 24. My colleague called the contact line a short time later and asked the same question, but was told if the number of advisers, including trainee advisers in our ARs exceeded 24, we would become a network.
“In order to try and get a definitive answer, I contacted the FSA. I detailed both answers and added its Feedback to CP174, which states: ‘To maintain consistency with our treatment of existing networks, and any networks that are formed by the general insurance and mortgage markets, we have mirrored the definition used for IFA networks.’ I asked what this meant, and why had it not been made clear? A couple of weeks later I received a call from the FSA, who told me the first answer was correct. When I brought her attention to the counter arguments, including the response to CP 174, she thought she ought to refer up again.
“After another couple of weeks, I called to check on progress, but was told that this enquiry was marked ‘closed’, but had since been referred to the general council division.”
Sam Bennett, spokesperson at the FSA, confirmed the first statement from the FSA was correct and apologised for any confusion caused to the broker, which he welcomed: “Well done MI. I have been communicating with the FSA for almost four months and have now finally got an answer.”