The FSA's refusal to monitor whether software firms are improperly exploiting fears of FSA regulation to sell their systems (see news pages) is doing itself and the broking community a great disservice.
The regulator has already made clear that it will not tolerate networks that use scaremongering tactics to recruit new members. It has also set up a compliance consultants steering group because of concerns over the quality of some of the consultants in the market.
Why then is the FSA unconcerned about the sales techniques of software providers?
Monitoring networks quite rightly ensures that brokers receive only good quality advice and are able to make the appropriate decisions for their businesses. It is also good for the FSA's image, helping to promote it as a caring regulator.
These considerations are no less relevant when it comes to the software houses. Software systems will play a vital role in helping brokers with compliance. Indeed. the FSA acknowledges this, and has set up a software providers' forum. This would provide the ideal platform to put in place a form of monitoring regime, whether under the FSA or the software providers.
It is illogical and inconsistent for the FSA to refuse to monitor the sales techniques of software firms when similar activities by networks are treated very seriously.
To continue such an inconsistency will only serve to hinder firms' efforts to become compliant.