The warning came as the FSA announced the results of a review of 161 brokers, which found those who had used the regulator’s ‘Client Money Guide’ had shown a marked improvement in their standards.
Sarah Wilson, insurance sector leader at the FSA, said: “Ensuring that firms protect client money remains a priority. We are still concerned about the overall level of compliance in this area as some firms only used the help available once they knew of our forthcoming visit or did not use it at all.
“Our previous client money work revealed a worrying level of failure. Effective tools are now available to help ensure compliance where there is any doubt and any failures that we identify will be viewed seriously.”
The FSA said the ‘Client Money Guide’ had helped brokers improve in a number of areas, including accuracy in client money calculations, segregating client money in trust accounts within one day of receiving funds and arranging for client money systems and controls to be audited.
Sole broker Tony Catt said: “
I’m glad to hear that it is helping as there are a lot of people who need a process to get things right. If the FSA is providing the tools to help brokers then that’s a good thing. Prevention is better than a cure.”
