FCA fines totalled £229.5m in 2017
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Compliance experts warn that regulator still has appetite for issuing fines.
The Financial Conduct Authority (FCA) handed out £229,515,303 in fines in 2017.
For brokers the figure was dominated by the £4m bill sent to Bluefin. However, Deutsche Bank topped the charts with a £163m punishment.
The 2017 figure was far from the largest annual total – see graph below – but it was certainly not the smallest either.
And compliance experts have stressed that the regulator’s appetite for using the tool will not diminish in the next 12 months or indeed years to come.
“The FCA has lots of enforcement tools and fines are one of them,” summed up Terence Clark, compliance director at RWA.
According to Clark fines “attract the headlines” and “make people take notice”.
However, he stressed: “Fines will continue to be a major part, not just because they are headline grabbers, but because having monetary fines for the firm or individual miscreant hits people where it hurts.”
Likewise Branko Bjelobaba, founder of Branko Ltd, described fines as an appropriate "sanction that the FCA can levy on an organisation that has not behaved properly or treated customers fairly".
Adding: “Beware if you have dodgy or corrupt practices. The FCA will find you and clamp down on what you do.”
Attention
Both Clark and Bjelobaba listed the Insurance Distribution Directive (IDD), GDPR and the Senior Managers and Certification Regime (SMCR) as areas for brokers to pay particular attention to in 2018.
Bjelobaba noted that the IDD appeared to have been delayed.
“That is good because it allows firms more time to get their heads around the new requirements.”
But he counselled: “Some of those can be implemented ASAP, you don’t have to wait until the end of October.”
Consent
As Clark flagged, the GDPR rules were not strictly an FCA issue but he still advised that with the regulations set to impact in May it was “going to cause a lot of work,” and needed “a lot of thought and planning”.
Bjelobaba said he was advising clients that where they did not have explicit consent to use data to market to customers they should not do so.
The third tool in the box cited by both experts was the SMCR.
In Bjelobaba’s view with the conduct rules being extended to everyone firms should make sure they have kept up to date by reading about the topic, attending events and speaking with the British Insurance Brokers’ Association and compliance experts.
“If you are doing things right you have nothing to fear,” he concluded. “Absorb everything that is going on around you.”
Similarly, Clark pointed out that the Treasury was yet to publish the final date and the rules may not come into force for brokers until 2019.
Agenda
He argued that despite the time lag it was something brokers should still have at the top of their agenda.
“We’ve almost got two years but it is going to have a huge impact on documentation, application processes, training, HR and recruitment. There is an awful lot that brokers are going to have to prepare for.
“The sheer volume of work needed means the sooner brokers can start thinking about it and planning [the better].”
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