Leading industry journal Insurance Ties has done a sort of survey thing on what brokers think of regulatory body the FCA, and apparently they’re not that keen.
For starters, a lot of brokers are a bit hacked off with all the paperwork they have to do around regulation type stuff. One in four respondents to the Insurance Tights survey rated this a their biggest beef with the FCA and everything it stands for.
And if it’s not paperwork they’re moaning on about, it’s money. Fully 22% of brokers questioned said they were more bothered about the cost of FCA regulation than anything else, quite frankly. While 20% said their biggest gripe was that being regulated would make them uncompetitive.
There’s loaded… and there’s overloaded
Commenting on these controversial findings, business consultancy bloke Robin Hood of Robin Hood Associates warned Insurance Types that there is a very real danger that “The FCA’s drive for better behaviour in the insurance broking sector is overloading firms and customers with information.”
As the findings of this important and revealing new survey make abundantly clear, given the choice between being regulated, on the one hand, and, on the other, saving a load of time, money and hassle, most brokers would rather give the FCA a miss.
According to anecdotal evidence, no fewer than one broker told researchers that the FCA doesn’t “understand the real competitive world in which we operate.” Clients don’t want all the useless paperwork that is “now routinely sent with renewals” and sometimes even with quotes, this broker argued. They won’t read it, he insisted, adding dismissively that “the average consumer has not got a clue about the endless reams of bumf being sent out.”
Job done – now back off
Not everyone was totally negative about the FCA. Around a third of respondents accepted that the regulator might have a role to play in “helping staff to become more professional” or “improving customer outcomes.”
But, again, one broker (not sure if it was the same one) argued that “All the cowboys have been weeded out and the garden can now flourish.” On this basis, it’s hard to understand why the regulator is still hanging around littering up the nice tidy garden with all its unread and unloved paperwork and stalking imaginary cowboys amongst the hardy perennials.
Sustaining the horticultural analogy, while shifting adroitly from a weeding to a watering metaphor, one broker added that, if the FCA did insist on hanging around it should at least tiptoe more lightly through the intermediary tulips and consider switching from a water canon to a watering can.
TCF: Take a chill-pill, FCA
Like the God of Genesis working overtime or the global motor manufacturing sector, the FCA is “creating too much too fast,” Robin Hood argues, thus triggering a classic Marxist crisis of overproduction. “The overload of information is becoming counter-productive to the concept of TCF,” Hood warns, raising the spectre of a Marcusian crisis of counter-production.
“The small broker is still having to do too much,” Hood insists, drawing a distinction between pure and impure brokers. “There are a lot of people out there,” Hood gestures vaguely, “who don’t have the integrity of pure insurance brokers. My argument to the regulator is that, with the pure insurance brokers who give advice to clients, one should take a view that they should be treated differently.”
Delicate flowers, not meat on the street
There is some suggestion that this may already be happening, with one broker (them again?) observing that “what we seem to see is the smaller broker on the street being picked off as they are ‘easy meat’, while the practices of some of the larger consolidators and banks continue regardless.”
So basically, this latest research, shows the regulator must tend small pure brokers with a gentle touch, not overwatering them or flattening them with what broker body BIBA has described as a sheer weight of paperwork, and not pruning them back too harshly, which might be all well and good with banks and that, but is simply not appropriate for smaller, purer and more delicate brokers.
Hopefully that’s all pretty clear.
Excessive red tape?
No responses yet