DISSATISFIED investors face a confusing autumn and winter as the newly established Personal Investment Authority gradually takes over from Fimbra and Lautro the task of regulating financial advisers and investment companies.
The PIA is a controversial last-chance attempt to make self-regulation work in the financial services industry. In theory, it should herald a simpler regulatory regime.
Many investors have been baffled by the number of organisations - and the proliferation of acronyms - created by the Financial Services Act. The PIA's launch will eventually lead to the abolition of Fimbra (the current regulator for independent advisers) and Lautro (the regulator for life assurance and unit trust companies). For the first time most financial advisers, tied sales agents and investment and insurance companies will be overseen by one organisation.
However, the PIA is running in parallel with Fimbra and Lautro. Financial advisers and insurance companies have been slow to apply for PIA membership, and the PIA has been slow to vet them (the authority says that, out of an expected membership of 5,500 to 6,000, 3,840 applications have been received and 1,321 so far approved). So at present, there are three separate organisations formally responsible for overseeing companies, and three separate procedures for dealing with complaints about investments - a state of affairs likely to last well into 1995.
The PIA's own complaints procedure came into operation on 18 July, but it applies to companies only from the date they are admitted to PIA membership. The PIA has told companies to keep records of earlier complaints separate.
The first task for anyone wanting to complain about an investment, therefore, is to ascertain whether PIA rules apply. This will not necessarily be clear from a firm's literature - confusingly, PIA rules allow its members to use old stationery and publicity referring to Fimbra or Lautro until next April. Advisers and investment companies are unlikely to notify customers individually when they join the PIA.
The PIA's new free leaflet, How to Complain, recommends that investors check a company's current position either with the firm itself, with the SIB's central register (on 071-929 3652) or the PIA consumer help desk on 071-538 8860. A more difficult …