The fall of Ward Evans in 2002 and Willis’s recent record fine show just how much regulation has changed in the past few years
Two very different tales of regulation unfolded this week. On the one hand, we have Mike Kenney telling his version of events back in 2002, when his firm, Ward Evans, went bust after the discovery of discrepancies in its client money accounts. On the other, we have Willis’s record fine for failing to have the proper anti-bribery controls in place in between 2005 and 2009. How the world changed between these two events taking place.
In the heady pre-FSA days, Ward Evans was left free to make such catastrophic errors with its client money accounts that it was forced to sign itself into administration. There was no regulatory detection, intervention or consequence. That degree of laxity is simply unthinkable today.
Less than a decade later, one of the country’s biggest brokers is given an eye-watering fine and a public dressing down for failing to control what many considered at the time to be usual business practices. That’s not to excuse Willis – it has broken the rules, held its hands up, and must take its punishment; the behaviour is out of character for a broker that prides itself on its integrity, and thus all the more embarrassing. But the fact remains that Willis was far from alone in making payments to third-party ‘introducers’ in overseas territories, and the people involved at the time probably didn’t think they were doing anything wrong.
The rules have changed with dizzying speed, together with the market’s perception of right and wrong. The expectation of professional behaviour among brokers is so much higher now; and the penalties so much fiercer.
It’s for the best, considering that the old regime allowed brokers such as Ward Evans to make such major errors. Regulation has brought many problems – the most glaring being the shocking iniquity of the FSCS, which Insurance Times will continue to fight. But it has also seen broking turn from a job into a profession, and few would argue with that.