25th October 2007

FSA mystery shopping exercise coming to you soon

According to this week’s Money Marketing, the FSA is piloting what it refers to as a shadow shopping campaign to assess the quality of mortgage and investment advice being given to consumers.

The article goes on to state that the regulator is recruiting members of the public with genuine financial planning needs to carry out the survey and report back to them. It believes that this will provide genuine tests of advisers' competence and be a better method of monitoring the suitability of advice.

The pilot scheme will run until the end of the year when a decision will be taken on whether to roll the project into a full campaign, which would start operating in the second quarter of 2008.

AIFA director general Chris Cummings has criticised the exercise, branding it a waste of money. He says: "It appears they will only come out with a result that says the advice was suitable, or not suitable - yes or no. This will give, effectively, a binary result with no flexibility that perhaps part of the advice was more or less suitable with reasons why."

FSA spokeswoman Sam Bennett is quoted as saying: "This is forming part of our thematic work plan to investigate the quality of advice. This is a very innovative method for us and we have been working with the industry to take it forward."