Brokers should live with, but not for, FSA compliance, according to Paul Smee, director general of the Association of Independent Financial Advisors.
Speaking at the Biba conference, Smee urged brokers to keep a sense of proportion and a sense of humour when dealing with the FSA.
"Regulation should not be a paper chase. That is not to say you should not keep records. It means you should communicate with the client. The client's interests are paramount. It is not just about ticking boxes."
Speaking from his experience guiding the IFA market through regulation, Smee advised brokers to short-circuit problems before they reached the FSA.
He said regulation boiled down into three golden rules: compliance should be a professional part of any company, not an add-on; rules begat rules; and that regulators abhorred a vacuum.
However, he warned the market not to focus too closely on compliance and the FSA while the Financial Services Ombudsman and European legislation were also lining up to challenge brokers.
Meanwhile, Ernst & Young's Trevor Newbery warned brokers at the conference that "if it's not evidenced, it doesn't exist" as far as the FSA was concerned.
Newbery warned if there was no documentation to show the FSA or clients in support of business services, then the FSA would crack down hard after statutory regulation began in January 2005.
