Secondary sector takes centre stage

As the deadline to apply for regulation at the discounted rate ended recently, debate over the true cost of compliance started to resurface, as did the issue of the commingling of funds. But, while there are outstanding issues that remain to be hammered out, most brokers, having submitted the applications they have carefully pored over for months, are likely to now be flitting between relief, anticlimax and keeping their fingers crossed.

However, while the Financial Services Authority will be processing brokers' application forms in earnest, the regulator has its work cut out with the emerging debacle regarding the sheer ignorance of secondary intermediaries - a fact that is hard to ignore.

At the Professional Broking round table, held shortly before the British Insurance Brokers' Association conference, Ashley Canning, chief executive of Keelan Westall, claimed an alarming number of secondary intermediaries have not even heard of regulation (see feature, p36). This is backed up by recent figures from the FSA, which found there to be lack of understanding of regulation in the secondary sector, particularly retail, which had a measly awareness level of 15%.

Andrew Paddick, director general of the Institute of Insurance Brokers, has suggested their ignorance was down to the fact that many are not members of associations and do not read the relevant trade press. But, even those who are aware seem to be in denial. The appeal from the Royal Institute of Chartered Surveyors for an exemption for its members, on the grounds that selling insurance is a non-core activity, must also have been a worrying indicator to the FSA that secondary intermediaries were not getting the message.

Now that brokers have, as suspected, rushed at the last minute to apply and passed the deadline watershed, perhaps the intense spotlight of press speculation may move to illuminate the plight of the FSA with secondary intermediaries.

May saw the most attended BIBA conference in Glasgow, with 'blood, sweat and beers' serving as the unofficial theme (see BIBA Conference News, p10). Also during May, the PB team was busy collating and commissioning work for the supplement, published with this issue, commemorating the 10th anniversary of Professional Broking. One of the articles' themes - looking back 10 years - proved very illuminating in light of the regulatory challenges faced by the industry today. I dare say seeing all the momentous changes endured by the industry over the last 10 years totted up over a couple of pages may serve to put current challenges into perspective.