As the deadline for applications to the PIA, the new retail investment regulator, closed last night, large advisers reported a huge increase in the number of firms hoping to join them. Any adviser that had not applied to the PIA by midnight will cease to be authorised and cannot trade. Some financial advisers are hoping to circumvent this by joining firms that already have PIA authorisation.
Don Westacott, deputy chairman of DBS, Britain's biggest network of independent advisers, said: 'We normally have an application rate of 30 advisers a month. This jumped to 400 in May.'
DBS has 120 applications in the pipeline from former members of Fimbra, the old regulator.
If firms are not accepted by DBS they must apply to join the PIA directly or cease to trade.
About 4,800 firms from a total of 5,500 had applied to join the PIA before yesterday's deadline. PIA membership will consist mainly of former members of Fimbra and Lautro, the regulator for life insurance companies. No one yet has been turned down for membership. A spokesman for the the PIA said some of those that had not yet applied might have joined another regulator, signed up with a network or decided to leave the industry altogether.
He added: 'Some will miss the deadline and cease to be authorised to trade. About 100 have not yet indicated what they are going to do.'
Lautro members that do not apply to the PIA will automatically become regulated by the Securities and Investments Board.
The Prudential, Britain's biggest insurance company, is still refusing to join the PIA. It will now be regulated by the SIB.
David Linnell, Prudential's group actuary, said: 'We want a full-scale review of regulation along the lines of a royal commission or the Goode review of pensions.'
Some of the 440 Lautro members that have applied to the PIA but have not yet been accepted may still be under investigation over compliance failings.
The PIA said: 'Their applications will not even go to the membership committee until any disciplinary action has been sorted out.'
Allied Dunbar and Abbey Life are among companies that have yet to be accepted.
View from City Road, page 17.Reuse content