Regulator launches three-year programme to find brokers failing to treat customers fairly
Small brokers across the country are bracing themselves for the arrival of FSA inspectors as the regulator begins a nationwide programme of assessments in March.
The FSA plans to inspect 11,300 retail intermediaries in the next three years, including 3,000 small firms this year and 4,000 small firms a year from 2009.
The regulator has pledged to get tough on businesses that are failing to meet its Treating Customers Fairly principles. It said last November that 41% of small brokers were not complying.
The visits will begin in Northern Ireland before moving to cities around the UK. A series of regional roadshows will be followed by structured visits or telephone interviews.
Andrew Honey, head of insurance in the small firms division of the FSA, said it was important that brokers engage with the FSA.
He added: “We will ask them questions like how they approach the customers, how they deal with complaints and a whole range of management issues relating to the interaction with their customers. We will then assess their answers.”
Honey said there could be tough outcomes for brokers who are not complying. “There is a range of enforcement actions but we are sending a very clear message that is part of this strategy.”
Steve White, head of compliance and training at Biba, said brokers that were complying with the rules had nothing to fear from the visits.
“We have had a number of brokers saying, ‘I wish the FSA would come and look to see what we are doing’,” he added.
Firms have until March to put in place systems that comply with the Treating Customers Fairly principles and until December to demonstrate that they are treating their customers fairly. The assessments will continue after these deadlines have passed.