Only a third of intermediaries about to come under Financial Services Authority (FSA) regulation have read any consultation papers on mortgage and general insurance regulation, an intermediary survey from insurance specialists Select & Protect has revealed (see chart top right).
The survey also found that 78% of intermediaries felt that FSA communication of the issues had been ineffective. Simon Hood, chief executive of Select & Protect, said: ‘What these results indicate to me is that an awful lot of brokers are relying totally on their network or tied company to tell them what to do.
‘FSA communication may be considered effective by those parent organisations, but it is certainly not filtering through to the brokers. I am surprised such a percentage have not bothered to read even the short versions, which would at least give them an idea.’
The Association of Mortgage Intermediaries (AMI) was less surprised. Chris Cummings, director at AMI, said: ‘Most intermediaries have a big enough job running their business; expecting them to read and understand regulation consultation papers as well is asking a lot. This is a role that AMI plays for its members, to read the consultation papers and put across the key points to our members in a bite size, plain English form.’
The FSA continues to encourage all brokers to read the consultation documents, available on its web site. An FSA spokeswoman said: ‘To make them more digestible we have even produced papers in newsletter format. We would say: ‘If you read nothing else read the newsletter, it will at least help you to get to grips with the main points.”
According to the survey, 28% of intermediaries have already decided to become appointed representatives, (AR) with 8% choosing to become principals (see chart bottom left). Hood added: ‘We are surprised at the number who have already decided that they will be directly regulated. We need to come up with solutions for intermediaries by the end of the year if we are going to leave them long enough to make an informed decision and act on it.’
Select & Protect had been ready to offer an appointed representative solution under the cancelled General Insurance Standards Council (GISC) regulation and Hood said: ‘We would certainly envisage offering a similar service under the FSA.’
