Conducting a review of mortgage, general insurance and investment networks, the FSA found significant failings at a number of firms, with four being referred for enforcement action and another 11 potentially set for referral if major improvements are not seen at a further review next year.
The most common failings identified by the review included ARs not following the network’s guidance, ineffective communication between networks and ARs over TCF, and a lack of process to test whether ARs were working towards the December 2008 deadline for demonstrating a TCF culture throughout their business.
Stephen Bland, director, small firms division at the FSA, said: “It is disappointing that failings still persist despite the help and information available from the FSA. We have set a deadline of end December 2008 by which time we expect all firms to be able to demonstrate that they are achieving the six TCF outcomes. Principal firms therefore need to act now to ensure that they have appropriate controls in place and management information that enables them to be confident ahead of the deadline that their ARs are treating their customers fairly.”
However, the regulator did acknowledge that mortgage networks had made a noticeable improvement since its last review of the area in 2006, with general insurance networks lagging the furthest behind of the three sectors.
Frank Thurlby, director of compliance at GHL Group, said: “It’s disappointing 15 networks have been pulled up and it’s clearly quite serious. The FSA is challenging the market and saying regulation has been here for three years – if you’re not listening, we will punish you.”
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