Compliance research highlights FSA misjudgement

The FSA may have underestimated the extent of the problems facing the financial advice industry, according to new research on compliance standards.

A study by compliance support firm Management Services 2000 (MS2M) found the areas in which some firms are failing to meet the FSA’s standards are different to those the regulator warned firms to focus on.

Issues including the mis-selling of payment protection insurance and mortgages, as well as concepts including treating customers fairly (TCF), have been at the forefront of an FSA campaign to drive up standards in the market.

But Julie Alderson, sales director at the compliance support firm, says although the FSA is bidding to revamp the industry via the Retail Distribution Review (RDR), it may have misjudged some of the problems firms have.

“We have taken a representative cross section of the intermediary community [for this survey], including tied, multi-tied and independent, and we have had around 15% of the questionnaires completed.

“Let’s just say the results so far have brought up issues the FSA is not focusing on at the moment.”

MS2M has launched the research to assess the risk profile of intermediaries “with regard to their compliance with FSA regulation”.

It has so far centred on mortgage and insurance advisers, and intermediaries working with Abbey, Future Mortgages, GMAC RFC, Halifax and Standard Life among others have taken part.

The firm has developed mysatcom.net, an online tool for advisers enabling them to assess whether they are keeping up with FSA standards.

It involves a questionnaire, with around 300 questions, which when completed will deliver a report overview highlighting where a firm is meeting, or falling short of, what is required.

“It is a complete FSA healthcheck,” Alderson says. “You will get to see how you measure up against FSA standards.

“It is a good way for a firm to be able to address some of the issues it may have and, if it doesn’t have any, it provides some validation that everything is ok.”

Alderson adds: “The FSA has made it absolutely clear that compliance is going to be a major focus this year and it is going to be aimed at smaller retail firms.

"So what we’re saying is here is a tool that will enable you to say: ‘I may not be perfect Mr FSA but at least I’m doing something about it. I know I’ve got issues but I haven’t just sat back and thought this will never happen to me.”

The FSA has voiced its support for the tool, which costs £649, but has not endorsed it. For more information on mysatcom.net, click here, or on MS2M, here.

Contact:
Scott Sinclair
News Editor
020 7034 2636
scott.sinclair@incisivemedia.com