Brokers are making progress in complying with FSA rules on client money handling and managing conflicts of interest, the regulator said this week.

Previously, the FSA had been critical of brokers, describing their under-standing of the rules as "poor".

But Sarah Wilson, director of retail firms at the FSA, said improvements had been made.

Wilson told the CII conference: "Our initial findings are that some progress has been made by intermediaries, in both the wholesale and retail market, in developing frameworks within their businesses to identify conflicts of interest."

On client money, she added: "We have observed some improvements in the general level of understanding of the problem of client money."

But she warned that ignorance was no defence.

Be clear on advice, FSA warns brokers
The FSA has warned brokers of the need to be clear about the level of service offered to customers. An FSA review found that some firms' demands and needs statements were not compliant because they did not confirm whether advice was provided.

"We found examples where firms were not explaining why a recommended product met a customer's needs," said the FSA. "Non-advised sales did not always confirm that the customer was required to select the product."