PIA likely to 'drive out 2,000 advisers'

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The Independent Online
UP TO 2,000 financial advisers will be driven out of business by the introduction of the Personal Investment Authority, an advisers' pressure group claimed yesterday.

The newly-formed Small Traders Action Group (Stag) believes many sole traders and other small firms will be unable to find the pounds 10,000 necessary to meet the new regulator's financial resources requirement. Stag says this and other PIA rules are inappropriate for advisers who do not handle clients' money.

Andrew Stradis, of Hastings, East Sussex, said: 'We just want to survive. We don't mind regulation, we just want a fair say. We are just little traders, little shopkeepers. We don't handle clients' money and we are not a risk.'

Stag has quickly attracted 420 members but Keith Artis, its founder, believes about 2,000 firms face similar difficulties. Its members have not applied to join the PIA and are holding out for special terms.

Mr Stradis said that before Stag was formed two weeks ago, the PIA was not interested in talking to smaller advisers. However, Mr Artis pulled out of a meeting with the PIA arranged for yesterday.

Colette Bowe, PIA chief executive, said the regulator was arranging another meeting and was anxious 'to pin down exactly what he's looking for'.

Stag wants the PIA to exempt advisers beneath a certain income threshold from the capital requirement and other rules regarded as onerous. Mr Stradis suggested investors could be safeguarded by introducing identity cards for advisers and by making it clear which advisers are not entitled to handle money.