Broker boss believes regulation for brokers has ‘gone too far’ and is ‘anti-entrepreneurialism’
The current level of regulation from the FCA targeting brokers is “ridiculous” and “suffocating small brokers”, according to William Cooper, managing director of family-run broker Stanhope Cooper.
Speaking exclusively to Insurance Times, Cooper acknowledged that although he understands why the FCA sought to bolster its rules around appointed representatives (ARs) earlier this month (August 2022), he believes the regime has now become “incredibly complex and labour intensive”.
This includes ensuring ARs have adequate systems, controls and resources, providing complaints and revenue data for each AR to the FCA on an annual basis, reviewing ARs’ activities, business and senior management annually, as well as assessing and monitoring the risks that ARs could potentially pose to consumers and markets.
“In some ways it’s good. I see why the FCA [is] doing it,” Cooper explained. “But in other ways, I just think it’s anti-business and its anti-entrepreneurialism, which is what this country is all about. I just think it’s such a shame.”
Circumventing entry barriers
For Cooper, a key issue is that cumbersome regulatory requirements provide a barrier to entry for new brokers looking to join the sector.
He said: “Loads of companies have just started with two people in a room just drumming up business.
“I like the fact that you [can] be a broker because you can just pick up the phone and just start - it gives people a chance.
“I just think regulation [has] maybe gone too far. [For] a smaller broker, it’s gone too far. The barriers to entry now are quite high. It puts people off.
“To start on your own as an independent [broker is] very hard, which is a shame because there’s going to be less variety for the consumer to choose from.”
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Cooper admitted that he was “lucky” because he comes from a line of seasoned insurance brokers – he is the fourth generation in his family to take up this career and have involvement in Stanhope Cooper.
However, he believes the only way that brokers can set up shop successfully nowadays is by being part of a broker network.
He continued: “To start up as a broker on your own, you’ve got to be part of [a] network - you’re paying away some of your commission and it’s difficult.
“There [are] different models out there and different ways of doing it, but I think you can only really go down the network route.”