Filling in the application form is not much of a start, says Elizabeth Mills
Undoubtedly the FSA brought us much bedside reading during 2003. But keeping abreast of FSA consultations and policy statements is one thing, knowing what to do in practice to ensure all relevant FSA rules are applied within the business is another.
The final rules were published in January, and I imagine the question on many lips is 'where do we start'? While there are still uncertainties over some key issues, not least that of risk transfer, there is much we must be getting on with to ensure we are ready for 14 January 2005.
And let us not forget other legislation that has, and will continue to affect us, such as that concerned with employment and discrimination - key aspects of which may easily get put aside with the ever increasing requirement to focus on FSA.
But the costs of getting on the wrong side of employment law can be severe. Last year 98,617 employees took their employers to employment tribunals, with unfair dismissal claims starting at £55,000, and the average race discrimination claim being £27,041.
We will all feel better once we have made a start on our compliance programmes, and while many will feel they have already done this because they have either registered their intention to apply, have started to complete the application form, or indeed have submitted it, I would question whether this is indeed much of a start.
Admittedly, it is a good job done, and one that will have taken much preparation time and thought. However, getting started is all about understanding what you need to do and then making the practical implementations to ensure you get there.
There is a huge comfort in having control over a situation and, until now, I do not believe we have had an opportunity to exercise that control. But now we have the final rules we can grab the bull by the horns and get going.
Two words used by a speaker at a recent FSA workshop were "perspective" and "proportionate"'. A positive message and one I think we should keep reminding ourselves of as we plough through the rules.
So, how should we go about it?
First, break the rules down and prioritise. Some parts of the rules can be implemented now (rather than just prepare for), such as senior management arrangements, systems and controls (SYSC), prudential requirements (PRU) and some parts of client assets (CASS).
Other areas may be better implemented later in the year, for example insurance conduct of business (ICOB), so that the transfer of learning from the time the staff were trained to the time they will be implementing the new procedures is realistic.
Next, identify the rules that apply to you and review what you are already doing to meet them. Then consider what else you need to introduce and produce an action plan as a result . Timetable the work that is required and decide who can help you.
The last consideration is quite a serious . The quality of advice in circulation varies considerably, and can be contradictory, depending on where you turn for help and advice. Statements and offerings claiming to get you compliant are dangerous. The only one who can get you compliant is you. However, that doesn't mean you have to do it alone.
But remember, compliance consultancy cannot be a one-stop-shop, unless that consultant is an expert in finance, accounting, senior management, IT, insurance selling, training and competence, human resources (and all the employment legislation that goes with it).
A professional compliance consultant will work with you to identify what rules apply, how you can implement them, how you can influence and train your staff and also how you can make compliance happen. Where expert advice is needed, this should be provided by professionals in that particular field.
As we are all very much aware, the FSA is here to stay and we need to make sure we are too. Admittedly we may have a long and tricky road ahead for 2004, but, putting all the moans and groans aside, let's get through the pain barrier, get compliant and get back to our business - broking.
