The intention of the Financial Services
Authority (FSA) to review every small firm it authorises this year,
including motor dealers, should be taken as an opportunity to
address faults in services, say motoring bodies.
The FSA review will cover the regulated
aspects of car dealerships: senior management identifying and
addressing risk, financial soundness, provision of insurance
products and services to customers.
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Three months ahead of the review, the FSA will
be running regional Business Risk Awareness Workshops for invited
small firms to identify gaps and acknowledge good practice in
governance, culture and controls – the “cornerstones of good
business practice”, according to the FSA.
The workshops will be tailored to sole
traders, smaller multi-adviser firms and larger multi-adviser
firms, some of which may be subject to follow-up work after the
review.
Dates and locations of the workshops will be
made available
on the FSA website here.
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By GlobalDataThe authority, soon to be
replaced by the Financial Conduct Authority (FCA), also hopes
to run a motor retailer event in the second quarter of 2012,
separate from the workshops.
Citing the promise by FSA chief executive
Hector Sants in March 2011 that the FCA would advance the FSA’s
consumer protection agenda with “intensive supervision of firms,”
Paul Guy, managing director of Automotive Compliance said: “The FSA
are backing up their words with actions.”
The question, says Guy, is: “do the dealers
under direct authorisation of the FSA understand the impact this
[sterner regulation of markets] will have on their business when
the new regulator starts delivering their objectives?
“This is a strong message to those dealers to
ensure that there are no gaps in their current FSA process.”
The Finance & Leasing Association (FLA),
who have
voiced trepidation over the expected Financial Services and
Marketing Act model to be used by the FCA and applied to
highly-intermediated credit markets, is in favour of the review by
the FSA as far as it ensures good practice among members.
“We support all efforts as part of continuous
improvements to customer service,” said a spokesperson for the FLA.
“Our Lending Code, of which a revised version is being launched on
1 February, requires all FLA members to follow FSA rules on selling
insurance.”
The Retail Motor Industry Federation has
likewise said that it was making members aware of the review and
advised them to attend the workshops.
richard.brown@vrlfinancialnews.com
