What? Wild exaggeration; scare mongering; any number of adjectives that would provoke fierce debate ("FSA to shut 25% of brokers", 24 October, Insurance Times).
I am not sure why this article was published - other than to attract such debate.
Clearly Gary Dixon of PYV Corporate Resourcing is attempting some form of marketing exercise in terms of his business (presumably a recruitment agency).
It may frighten a few into some form of premature action, but what it most clearly demonstrates is a lack of both knowledge and common sense. While the exact nature of the impact of an FSA regulatory regime on the broker community is still under consideration, it is wildly simplistic to suggest that the cost of compliance with such a regime will be at least £200m.
Taking a holistic view of the issues of risk management in general and, more specifically, operational risk - the people and processes involved in the conduct of a regulated business - there is much than can be transferred from current best practice. Pure insurance broking firms may well find themselves conducting their business in a manner that is not at odds with an FSA-regulated environment.
The FSA will require, as it does of other sectors, that senior managers apply best practice appropriate to the nature and complexity of their businesses.
I, for my sins, am a headhunter - a specialist in commercial risk management and financing. I do not for one minute support the type of article published. I would certainly not suggest that every broker needs to: a) recruit a compliance officer, b) join a network, or c) risk closure as an alternative to a perceived high cost compliance.
Such reactionary response as advocated is the opposite of what the FSA would wish to see.
In particular, the concept of network membership where accountability for regulatory control might be held by a third party ("the network") is at odds with an ideal of accountability resting with the managers who actually run the business.
Now is not the time to go to a recruiter and seek a compliance officer. Now is the time for the "managers" to take a look at their present business situation in the light of best practice - to perform a gap analysis which would then suggest the most appropriate way forward.
CNA Executive Search (AML)
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