Broker survey suggests a positive response to FSA regulation
With one year to go until FSA regulation begins, the vast majority of brokers intend to remain independent, according to new research.
A survey of 300 brokers, conducted by NMG Research on behalf of broker Stuart Alexander, found that 93% of brokers plan to become FSA authorised and stay independent.
Just 6% are looking to sell, with most of those planning to do so within the next year. They listed reputation and price as the most important factors when choosing a buyer. A further 7% said they were looking to merge with another broker of a similar size.
Networks received the thumbs down from respondents, with 67% of those not currently in a network saying they would not consider joining one in the next two years.
Those that are network members listed improved commission terms, better service from providers and reduced compliance requirements as the key benefits of membership.
The survey asked directors of commercial brokers across England with turnover between £500,000 and £10m about their thoughts on regulation and their future business intentions.
The majority, at 72%, were positive about the future of the commercial insurance market. More than 80% said they were planning to grow over the next two years, with 22% intending to acquire other firms. Those with a turnover of between £5m and £10m were the most bullish.
The attitude to FSA regulation was predominantly positive - 48% believe regulation will be beneficial to their businesses. Most brokers were also upbeat about the FSA's key proposals with more than 60% responding that the client account rules, professional indemnity requirements and capital adequacy requirements would have no significant impact on their firms.
But 47% of brokers believe additional information requirements under the FSA will be detrimental.