Tracey Mullins, director of public affairs at AMI, commented: "We are pleased that so many advisory firms met 31 March deadline. By this date, firms had to successfully implement the changes needed to comply with the FSA’s TCF initiative in a substantial part of their business. However, it is deeply disappointing that so many small mortgage advisers failed to meet the deadline and we will continue to help our members as best we can to improve this situation. We welcome the commitment from the FSA to strengthen its communications with small firms on TCF.”
She concluded: “But failing to meet the deadline does not automatically mean that small firms are not treating customers fairly; neither does it mean that those firms who have met the deadline have no more work to do on this front. Meeting the deadline demonstrates that a firm has a plan for how it intends to meet the FSA’s requirements; the survey focused on process not outcomes. It is also worth pointing out that the FSA may have given a large firm many action points that could take months, or years, to correct whilst an intermediary firm may only have a small number to address”.
Other points:
- AMI’s research found that over 70% of members were either implementing or on their way to embedding TCF in their businesses by the deadline. It is noticeable that the FSA's research was conducted in December and January - some three to four months ahead of the deadline. The FSA has stated that smaller firms are faster to respond so there is a time-lag problem between FSA's data and that of the industry. We are pleased to note that the FSA has stated, “We therefore expect that some small firms will have made further progress between January and March and will test this as part of our follow-up work.”
- It is significant that the FSA is now trying to measure the outputs of regulation - as well as just process. As the National Audit Office found, larger firms are more likely to take to principles based regulation faster, given the depth of the relationship they enjoy with FSA. The close and continuous supervision of these firms means they can pose questions and seek clarification in a way that is simply not possible for a small firm whose only contact is the FSA's Contact Centre.
- The FSA has stated that when they discussed how to implement TCF with smaller firms, they found those firms willing and swift to respond. Smaller firms need more help to implement TCF in a manner the FSA understands. This means that the FSA must work harder to better understand the needs of smaller firms and offer more practical assistance to them and we are pleased that they have stated publicly that they are committed to do this.
