Nausicaa Delfas, head of mortgages and general insurance supervision at the regulator, told a crowd of industry professionals that adviser firms would be ranked based on size to ascertain what level of supervision the FCA would give them.
“Adviser firms will be classified between C1 and C4 depending on the impact they have on consumers, with the exact boundaries being drawn in early 2013.
“The lower ranked C3 and C4 firms will have no dedicated supervisor attached because we need to deploy our supervisors to the areas where they are most needed.
“The FCA will move from a relative approach, looking back at what went wrong, to looking ahead and trying to stop problems before they get too big.”
The regulator said that all firms, regardless of size, would be contacted at least once every four years using online questionnaires and but suggested that more regular interaction with the regulator would decrease the chance of individual visits.
“We will implement three methods of supervision; a firm systematic framework, event driven and issues based work.
“The event driven part will allow us to react to issues that are outside the risk assessment quickly and find the appropriate remedy for the issue. The issues and products part is similar to our current thematic work.”
The regulator said that following FSA investigations, five cases had been referred to the police and 19 firms have left the industry because of regulatory intervention.
When challenged by AMI’s Robert Sinclair over individual registration, the regulator said that the decision to split the FSA had prevented the launch of such a scheme.
“Once the decision was made to split the FSA, all our efforts went on systems. If we were still as one, maybe it wouldn’t have yet been implemented, but it would have been progressing.”
The regulator also confirmed it will take MMR roadshows around the country, with brokers being contacted with invitations this week.
