Increased supervision and contact with small retail intermediaries
We will be assessing approximately 11,300 small retail intermediaries via a three-year regional assessment programme starting in Northern Ireland in March. These will cover financial advisers, mortgage brokers and those general insurance intermediaries selling higher-risk products.
We will assess just under 3,000 firms in 2008, and some 4,000 each year from 2009. We expect to carry out full on-site visits to around a quarter of these firms to verify the assessments and follow up any issues identified. As a result of these rolling assessments, and our other supervisory and thematic work, we will have some form of contact with most of the 17,000 small firms we supervise every three years or so.
We will conduct the assessments through a combination of mini visits, meetings and telephone interviews. This contact is designed to gain an insight into the approach of a firm's management and to assess how this is affecting the firm’s progress on TCF. The results of the assessments will help inform our risk-profiling of individual firms so we can more effectively target resources at the firms that may pose the biggest risk to our objectives.
We want to work in partnership with those firms who are trying to do the right thing by treating their customers fairly. At the same time, we will identify and take action against those firms that are not engaging with us and are not committed to treating their customers fairly.
We are introducing new style roadshows to accelerate this process. The aim of these events is to deliver messages to firms during a period where they are preparing for and being assessed. We believe this will maximise the opportunity for messages to be acted upon and firms' thinking and behaviours to be challenged and changed, if necessary.
Our aim is to create an environment for firms where understanding of compliance and good practice standards is widespread and firms are fully engaged in meeting those standards. We hope that those firms yet to be assessed will still engage because they will understand that they will face assessment and will want to find out more.
The roadshows will be linked with our regional assessment programme by holding the roadshows in a particular region ahead of the assessments within that area. Communicating to firms through roadshows is an integral part of these new measures and will contribute towards smoother assessments and higher levels of compliance.
We aim to reach every eligible firm (at the time of the assessment) within every postcode in the UK, thus engaging with firms in every single corner of the country. We very much hope firms embrace these new measures as they will provide direct benefits: increased contact and help; a tough stance against those firms not engaging with us and not committed to treating their customers fairly; higher industry standards; better consumer protection and increased confidence in the industry.
Further information
Exchange of views between the FSA and a practitioner about the increased supervision of small firms [PDF]