Brokers must speak up - or face disclosure
I was gratified to see at the weekend that at least one person appeared to be reading my blogs.
Flicking through the Sunday Times, I paused to read an article by Kathryn Cooper about water being the new oil. Investment bank Goldman Sachs has described water as the ‘petroleum for the next century’ labelling it the next ‘hot’ commodity in which to invest, according to Cooper.
Global demand for water is soaring, while its quality is deteriorating and getting supplies to those who need them is getting more difficult – it all sounded depressingly familiar. However, for me it’s not a case of familiarity breeds contempt, but rather a realisation that persistency pays. If enough people give the same message loudly enough then people eventually have to sit up and pay attention to what is being said.
That reassures me immensely as we enter the last remaining weeks of the debate concerning the FSA’s discussion paper 08/2 on transparency, disclosure and conflicts of interest in the commercial insurance market.
It is a debate that BIBA has been heavily involved with since 2005 and we have informed and encouraged our members to play a part in those discussions at each stage.
“For me it is not a case of familiarity breeds contempt, but rather a realisation that persistency pays.
There have been times where I’ve felt like a stuck record saying that BIBA is of the view that we do not need the FSA to mandate disclosure; but we really don’t. Provided firms are actively indentifying and managing conflicts of interest have a process in place to fully disclose commissions if asked and are more transparent in their TOBAs then the FSA’s case for mandating reduces.
This is such an important issue. We know that some of BIBA’s members have already taken the time to respond to DP08/2 and write to Hector Sants at the FSA to inform him of their views, but there are still many more that have not. It is imperative that the FSA hears directly from you, the practitioner, by the 25th June 2008 deadline.
It is our profession and our businesses that will be affected should there be a decision to mandate disclosure. Every single BIBA member I’ve met since this paper has been published has had an opinion on the matter, so why the reticence? Why not make the effort and communicate your views to the FSA which is duty bound to take into account the content and volume of responses received.
So this blog comes with something of a health warning - please, please, please respond to the discussion paper. BIBA will be making an official response and is working on a market solution, but the FSA also needs to hear from as many individual firms as possible.
If they don’t, the regulator will never know the full strength of opinion on this issue and be able to make an informed decision which results in a satisfactory resolution for all in the industry.