64 per cent of members surveyed believed the regulator’s principles-based approach would lead to greater administration for brokers, with only 13 per cent disagreeing with the statement. 24 per cent were unsure of the impact it would have.
The census also revealed 39 per cent of respondents thought the move towards principles-based regulation would improve things for all firms. 6 per cent thought it would improve things for small firms only, while 14 per cent thought it would improve things for larger firms only. 41 per cent thought it would not improve things for any firm.
While 22 per cent of AMI members believed this regulatory shift would give them more flexibility to decide how to meet the Financial Services Authority’s (FSA) standards, 57 per cent thought it would bring more uncertainty over what is and is not compliant. Concerns were also raised over complaints; 28 per cent felt it would become harder to defend complaints following the move to principles-based regulation while 19 per cent believed it would mean a greater need for the FSA to police the market.
Commenting, Rob Griffiths, associate director at AMI, said: “The impact of the move to principles-based regulation on a firm’s compliance processes is yet to be determined. AMI members are clearly concerned that the amount of administration and paperwork they have to complete will increase as a result. Interestingly, nearly a quarter of members are unsure about the impact, reinforcing perhaps the overall uncertainty around the regulator’s intentions.”
Tony Jones, managing director at Pink Home Loans, said: “In the short-term it is a lot of pain as brokers try to decipher what principles-based regulation will mean for them. It is likely to create more work, but there will be many benefits in the long-term as it will be better than wading through a 9,000 page rulebook.”
