APFA wants the regulator do more to protect consumers - “especially where there is a systemic cause”.
The call comes as the FSCS revealed advisers could face a further levy next year due to rising Sipps claims.
The body said that “we are seeing the same thing time and again in pensions” – with retail investors sold ‘inappropriate’ unregulated investments held within SIPP or SASS products.
Chris Hannant, APFA’s director general, said: “The FCA needs to do more as the current system is not working. A more thorough exploration of the options is needed with a tightening of the regulatory framework. Scammers are exploiting grey areas in the system to the detriment of consumers.
“Compensating people who have received a bad service, been mis-sold a product or conned should be the last resort. The level of FSCS levies is an indicator of the effectiveness of the regime in protecting consumers – the aim should be to minimise the need for compensation not just working out who pays for it.
“The regulator, the government and advisers should work together to protect consumers from high-risk or fraudulent investments in which they are highly likely to lose their money.”
APFA told advisers to play their part in warning clients about fraudulent investments by ensuring they have robust controls in place, by reporting any suspected scams to the FCA and committing to prevent their retail client’s funds ending up in unregulated investments.
Last week, the PFS revealed it is teaming up with the FCA on its national ScamSmart campaign and PFS chief executive Keith Richards said it is a "key responsibility on the advice profession".
Watch our video with Mr Richards below.
Keith Richards discusses scam campaign pic.twitter.com/gaLPqskMJz
— FP Today Magazine (@FPTodayMagazine) November 24, 2016