The FSA says it has increased its enforcement resources in a bid to tackle those firms that continue to fail to meet the regulator’s Treating Customers Fairly guidelines.
Speaking at the mortgage business expo in Belfast, outgoing FSA small firms division manager Dominic Clark admitted the regulator has increased its enforcement resources to deal with those firms that are failing to make the necessary changes.
Clark says it will be identifying those firms that are not meeting TCF requirements and it is prepared to make further enforcements.
The regulator’s ‘Enhanced Strategy’ initiative – which aims to help firms engage with its TCF principles – is to kick off in Northern Ireland in March. Clark says firms will be notified in advance about visits or surgery sessions will be arranged.
“We’ve seen a large number of firms over the years. It’s all about increasing the pace of change. We want to see small firms embedding TCF into all of their processes.”
Clark says there will be an impact on fees and this will be revealed in the FSA’s fee consultation paper set to be published on February 5. He dismissed speculation that fees will be increased over 25 per cent, noting that the 10-15 per cent range is more likely.
He says the FSA has already started the second round of its Quality of Advice work, with its staff contacting firms and visits already underway this week.
Clark warns that enforcements are likely to take place if firms have still failed to make the changes suggested to them following the first round of thematic work.
On the question of what sole traders should do to meet TCF requirements – which have largely been focused at large firms up until now – Clark suggests sole traders to meet up with fellow sole practitioners in order to find out what they are doing about assessing affordability in order to compare notes.
He says that with one-man bands, these firms should make sure they are maintaining their competence. Clark says: “It’s a case of sitting back and thinking what are the risks to me with this type of business. Are you getting complaints in? Who or what is receiving the most complaints.”
AMI director Chris Cummings says it will be sending information out over the next few days for firms – from small to large – to use as an example of what the regulator requires.