FSA – PPI NEW RULES

The Financial Services Authority (FSA) has announced a temporary rule to give customers who recently made a complaint about their purchase of a Payment Protection Insurance (PPI) policy more time in which to refer their complaint to the Financial Ombudsman Service (Ombudsman).

The temporary rule, which suspends the existing six month time limit for referring complaints to the Ombudsman, will come into effect from today and run for five months, until 27 October 2010. The rule applies to recent PPI complainants who have already been sent a final response from a firm between the dates of 28 November 2009 and 28 April 2010 inclusive.

This action has been taken to ensure recent PPI complainants are not disadvantaged by running out of time to refer their complaint to the Ombudsman while the FSA works to resolve a long term solution to ensure customers are treated consistently and fairly when complaining about the sale of a PPI policy, or when buying a new one.


Source: Financial Services Authority

FSA Website

MAKING PPI CALCULATIONS SIMPLE

• Are PPI complaints sapping your internal resource?
• Does your staff have to spend time making endless client contact with regard to complaints?
• Do you wish you could just get on with business as usual and let someone else take care of this for you?

Loss calculation can be incredibly expensive, not only when you have to write a cheque to a client (for loss they may have incurred as a result of a complaint or FSA enforcement review) but in addition you have to manage the process and find a compliant and accurate way to do the calculation.

You might be surprised to find it can be cheaper, quicker and easier to use TCC’s complaint handling and loss calculation services.

We deal with the Financial Ombudsman Service (FOS), third party complaint handling companies and directly with customers for a number of high profile clients.

Avoid the hassle, heartache and sleepless nights by calling us today on 020 7645 8808 or email info@theconsultingconsortium.com

TCC Website

FSA – MARKET’S REGULATORY AGENDA

The regulatory landscape for financial markets is undergoing a period of significant change. Various factors – some generated by the ongoing dynamics of the markets themselves; some from previous changes to the regulatory framework; and some from the need to deal with deficiencies highlighted by the financial crisis – are posing new challenges to markets regulators, particularly in Europe.

It is also clear that these challenges cannot be addressed at the national level, but need an international response. This paper sets out FSA strategy for regulating markets in the context of these developments and highlights our key areas of focus over the coming months.


Source: Financial Services Authority

FSA Website

The Consulting Consortium (TCC) provides a range of cost-effective solutions to meet all your FSA regulatory needs.

Any company that is regulated by the FSA can benefit from our experience and our range of compliance solutions.

For over 10 years, TCC has been providing expert support and guidance in the realm of FSA compliance. No matter what your area of concern we can help.

To find out how we can help you, please contact us on 020 7645 8808 or email info@theconsultingconsortium.com


Source: The Consulting Consortium

TCC Website

FSA – SMALL FIRMS FINANCIAL CRIME REVIEW

The Small Firms Financial Crime Review was conducted in response to the findings of the Financial Action Task Force (FATF) in its Mutual Evaluation of the UK (2007), and National Audit Office (NAO) recommendations (2007). Their conclusions were that the targeting and effectiveness of FSA thematic work did not ensure adequate knowledge of compliance standards by the small firms sector concerning financial crime.

To address the findings of the FATF and NAO, the FSA launched a major thematic project in April 2008, aimed at establishing the extent to which small firms across the financial services industry addressed financial crime risks in their businesses.

This approach allowed for a manageable sample size of firms (the FSA supervises around 16,500 small firms) to be included in the visit population, and for robust conclusions for the sector as a whole to be drawn from the findings. The project was re-phased due to the secondment of project team members in 2009 to bolster the supervision of high impact firms.

The review undertook visits to 159 firms, across the wholesale and retail sectors. It was the FSA’s first in-depth assessment of financial crime systems and controls in the small firm sector, and thus a part of the FSA’s more intensive scrutiny of the sector as a whole. The review covered three main areas – anti-money laundering/financial sanctions, data security and fraud controls.

Given the wide range of legislation and regulations applicable to the sector – with variations of applicability according to firm type – one element of the FSA review was whether firms clearly understood the requirements on them.


Source: Financial Services Authority

FSA Website

FSA – FEE RAISING

Consolidated Policy Statement on FSA fee-raising arrangements and regulatory fees and levies 2010/11 - including feedback on CP10/5 and ‘made rules’.


Source: Financial Services Authority

FSA Website

FSA – HANDBOOK NOTICE 100

The Handbook Notice 100 has now been published and covers a variety of topics.


Source: Financial Services Authority

FSA Website

ABI – NEW CHAIRMAN

Tim Breedon, Group Chief Executive of Legal & General has been nominated to become the next Chairman of the ABI. Mr Breedon will be formally appointed at the Association’s AGM in July when Archie Kane will step down as Chairman having completed a three year term of office.

Tim Breedon has been Group Chief Executive of Legal & General since January 2006, having joined the L&G Board in 2002. He has been a member of the ABI Board since July 2007.

Tim Breedon said:

“It is an honour to be asked to become ABI Chairman at this vital time for the insurance industry. The insurance sector was not part of the problem for financial services and the broader economy last year: it weathered the storm of the financial crisis well. Insurers can however be part of the solution."

"Insurance is already at the heart of a successful and well-functioning society - we price and manage risks for consumers, businesses and governments, enabling individuals to live their lives to the full and economies to grow through the long term investment the industry provides."

"There is however much more we can do to assist individuals, families, businesses and the economy towards recovery. As an industry we have to continue to improve our reputation with consumers, demonstrate our value to governments and work with regulators to ensure we are operating effectively."

"We face major challenges from regulators and governments, particularly in ensuring insurance is not treated as banking, but I am confident that the ABI will continue to engage constructively in the important debates still to come.”


Source: Association of British Insurers

ABI Website

ABI – SIMPLE AND EFFECTIVE FINANCIAL ADVICE

The ABI has launched proposals designed to give more consumers better access to simple and affordable financial advice. The policy paper, ‘Increasing consumer access to advice,’ reaffirms the ABI’s support for the aims of the FSA’s Retail Distribution Review (RDR). It also warns of the real danger that the RDR may end up restricting consumer access to advice, and calls for the introduction of a simplified advice process.

Maggie Craig, the ABI’s Director of Life & Savings, said:

“Every consumer should have access to affordable, credible financial advice. We know consumers prefer to get advice when buying financial products, yet our research shows that full advice costs £670 in total, and is beyond the reach of two-thirds of the UK adult population.

While there are barriers to providing simplified advice, they can and must be overcome. We look forward to continuing to work with the FSA to help firms develop these simplified advice services and offer them to consumers.”

Research featured in the paper also shows that consumers want simplified advice that delivers good outcomes. The potential benefits of this include:

• Faster and more affordable advice for consumers with straightforward needs who are unable to access full financial advice. A simplified advice process could provide a personal recommendation in just 30-45 minutes

• The process is automated and IT driven allowing it to be offered via the internet, over the phone or face-to-face using facilitators to guide consumers through the pre-determined questions.

The ABI and insurance industry has developed guiding principles on how a simplified advice process could work. At the policy paper’s launch, the ABI also expressed its willingness to work with the FSA and other stakeholders on taking its proposals forward.


Source: Association of British Insurers

ABI Website

RETAIL DISTRIBUTION REVIEW

The Consulting Consortium has the most comprehensive programme of support and guidance in the market to help Advisers achieve the required qualifications and ultimate business success.

We've put together an innovative range of services, designed with you and your organisation's needs in mind.

TCC provides support across all the examining bodies and is also an approved training provider for the ifs Diploma for Financial Advisers.

For more information on how TCC can help you cope with RDR and all the RDR Training requirements, please call us on 020 7645 8808 or email info@theconsultingconsortium.com


Source: The Consulting Consortium

TCC Website

CML – FUNDING ISSUES TO BE ADDRESSED

Gross mortgage lending declined to an estimated £10.2 billion in April, down 12% from £11.6 billion in March and 1% from £10.3 billion in April 2009, according to new data from the Council of Mortgage Lenders. This is the lowest April total since 2000 (£9.3 billion).

A slight seasonal decline was expected as Easter fell in April this year. Gross lending remains broadly in line with our forecast for lending of £150 billion for 2010 as a whole.

The CML notes that there have been signs of increased mortgage availability in recent months with higher loan-to-value mortgages becoming available and rates falling slightly. But it remains a difficult market, particularly for first-time buyers without large deposits, and lenders continue to face funding challenges.

The CML says that the imminent fiscal squeeze will drag on the speed of the recovery, which in turn will slow the pick up in the housing market, although the Bank of England’s welcome of the plans to address the public finances is likely to mean that interest rates can remain low for longer, which will help to support the market.

CML director general Michael Coogan commented:

“We welcome signs in the coalition agreement that some housing priorities are on the government’s radar. But we still do not know how the incoming government plans to address the funding gap looming over the next few years in the mortgage market. It is important that the new government grasps this nettle. Unless funding issues are addressed, any recovery in lending may well be curtailed as the repayment date on the support schemes gets closer.”


Source: Council of Mortgage Lenders

CML Website

LLOYD’S OF LONDON – STATEMENT ON RECENT DISASTERS

Lloyd’s have announced that it estimates its net claims before tax from the earthquake in Chile to be in the order of US$1.4 billion. It has also announced its current estimates for the net claims from the Deepwater Horizon explosion in the Gulf of Mexico. The estimate stands at between US$300 million and US$600 million.

As additional information emerges, Lloyd’s actual ultimate net claims from both events may vary from this preliminary estimate.

Lloyd’s preliminary estimate of claims from the two events is consistent with the upper range of industry insured loss estimates and draws on market share analysis, the application of modelling techniques, and a review of contracts in force as well as early estimates from each syndicate. It is difficult at this time to provide an accurate estimate of the financial impact of these events on the overall market given that both are still evolving.

There will be a negligible impact on Lloyd's capital and no Central Fund exposure from the events, either individually or collectively.

Lloyd’s Chief Executive Richard Ward said:

“Clearly these events have had a significant impact on both Chilean and US-coastal communities, as well as a severe environmental cost in the case of the oil spill off Louisiana. Our priority remains to assess and settle valid claims as quickly as possible in both regions and helping to rebuild."

"These figures are our estimates of the market’s total exposure. The claims relating to the Chilean Earthquake will evolve for some time, while the event in the Gulf of Mexico is still developing.”


Source: Lloyd's of London

Lloyd's Website

FOS – ANNUAL REVIEW OF PERSONAL FINANCE DISPUTES

The Financial Ombudsman Service has published its annual review covering the 2009/10 financial year. The review shows that during the year, the ombudsman:

• Resolved a record 166,321 disputes – a 46% annual increase – resulting in compensation for consumers in 50% of cases

• Handled 925,095 consumer enquiries – over 3,500 each working day

• Saw the number of insurance disputes increase by 38% (largely due to the rise in complaints about payment protection insurance), and complaints about banking and credit rise by 30% – but investment complaints stayed at the same level, motor insurance disputes decreased by 13%, and pension complaints fell by 27%

Natalie Ceeney, newly-appointed chief executive and chief ombudsman, said:

“This month marks the tenth anniversary of the Financial Ombudsman Service. Ten years ago the ombudsman was set up by law to settle 25,000 disputes a year – this year we’re expecting to resolve 200,000."

"While the aims and values of the ombudsman service remain unchanged, this eight-fold increase in our caseload means we are now operating on an entirely different scale. And these high numbers of complaints look set to stay – so we need to plan ahead on this scale for the next decade, ensuring we are ready to meet the demands and expectations of our increasingly diverse customers and stakeholders.“

Statistics from the ombudsman’s annual review show:

• Payment protection insurance (PPI) accounting for three out of every ten new cases referred to the ombudsman service – a 58% increase on the previous year, following a three-fold increase in the year before that

• Complaints about unsecured loans and financial hardship rising – but complaints about credit cards and mortgages levelling off

• Complaints about consumer credit (including “point of sale” loans, catalogue shopping and credit broking) more than doubling

• The proportion of complaints referred to the ombudsman service by claims-management companies on behalf of consumers continuing to increase – from 26% to 28% of all cases. Two-thirds of cases referred by claims management companies to the ombudsman service related to payment protection insurance

• The ombudsman resolving 38% of all disputes within three months and 67% of cases within six months

• Half of the total number of disputes referred to the ombudsman service involving four of the UK's largest financial services groups – while 2,259 businesses had one complaint each

• The proportion of complaints from "skilled and semi-skilled" workers ("C1/C2") increasing by 21% – with complaints from people from professional backgrounds falling by 23% in the last three years

• 75% of adults saying they had heard of the Financial Ombudsman Service – with awareness of the ombudsman highest in the Wales and lowest in Northern Ireland. 97% of people said they had no problem finding the ombudsman service’s contact details.


Source: Financial Ombudsman Service

FOS Website

FSSC – LIZ FIELD APPOINTED PERMANENT CHIEF EXECUTIVE

The Financial Services Skills Council, the independent, employer-led sector skills council for finance, accounting and financial services, has announced the appointment of Liz Field to the permanent position of Chief Executive, after it was required to recruit for a permanent Chief Executive following the renewal of its licence in March.

Liz Field joined the Council as Interim Chief Executive in October last year and has played a key role in developing and finalising the FSSC’s new strategy, restructuring the organisation and leading it to its successful relicensing by the Government. She is currently working with the rest of her team to deliver an improved sector skills council, instigating the changes that are necessary to meet its objectives.

Throughout her career, Liz Field has gained considerable knowledge and experience of skills in the financial services sector. Prior to her role at the FSSC, Field was Chief Executive of the FSSC’s predecessor organisations, latterly the National Training Organisation, before becoming Head of Organisational Development at Gerrard as part of the turnaround team, which led to the incorporation of the business into Barclays Wealth.

More recently she has run her own consultancy business helping a range of firms within the financial services and other sectors including IT and telecoms to implement change programmes, and coaching senior executives. Throughout this time, she has continued to work within the qualifications arena with other skills-focussed organisations.


Source: Financial Services Skills Council

FSSC Website