Do you have protection?

The build-up to the new Financial Services Authority regime took place amidst trepidation over the impact of compliance on brokers. Now it is here and, although the process of change undoubtedly created a significant amount of additional work, upheaval and uncertainty, the transition has, by and large, gone smoothly. The reality is that brokers that are profitable and well managed have nothing to fear from the FSA, which is there above all to help improve procedures and practices.

However, the advent of this new broking era also signals the onset of an increasingly complaints-driven and compensation-driven culture. In other words, an environment in which the overriding imperative for brokers must be to ensure that their systems are providing them with maximum protection - not from regulators but from the general public.

Brokers need to be able to document all interaction with customers and provide evidence to the FSA in the event of a complaint. While there are no short cuts to achieving this, IT systems can facilitate effective record-keeping and automate a number of procedures that will yield reliable evidence for brokers in the event of a dispute.

Three key areas in which technology can play a major role in assisting brokers are: voice recording for telephone conversations; mechanisms to provide digital files for all correspondence from customers; and, similarly, mechanisms that ensure records are kept of all correspondence sent out to customers.

While brokers have been filling in forms, the onus has been on software houses to complete development work that delivers this functionality and, ideally, enables all customer records to be stored together in the policyholder's diary.

This can been achieved through modules that 'plug in' to the core broking system, enabling the electronic capture of all client correspondence.

For retail brokers in particular, the availability of these modules provides a welcome addition to existing automation, ensuring that they, as well as their customers, are covered.