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With 151 small financial firms being de-authorised by the FSA in 2006/07 and continuing changes to the regulatory landscape, small firms need access to professional support which can be tailored to and is suitable for their particular needs.

A recent FSA report highlighted that small firms are not getting good advice from these small compliance consultants and in some instances companies are ignoring the good advice they have been given.

Huntswood, a leading provider of professional services to the financial services sector recognises that small firms, which make up approximately 95% of the regulated population, are those where senior management are likely to have the least capacity to take time away from their clients and customers and learn about the new regulatory approach.

Huntswood today stated that ‘there needs to be a mindset change among those that provide professional compliance support to the financial services industry. The continuing move to Principles-Based Regulation (PBR) means that advisors, whether embedded in firms or provided through external services companies, need to support and enable senior management to recognise that good compliance – irrespective of a firm’s size – is no longer a matter of focussing on specific rules and demonstrating that they are met.’

Eurfron Jones, Head of Regulatory Consulting commented: “For many, the biggest opportunity will be to take advantage of the broader standards (rather than specific rules) that Principles-Based Regulation allows. It is important, therefore, that the whole professional services community understands its responsibility to take on a greater role as trusted advisor and challenge conventional thinking for the advantage of small firms rather than the more traditional role of audit checker.”

PBR offers firms the opportunity to reduce red tape and cut cost whilst meeting the regulatory requirements, therefore it is not only desirable but critical that those advising the financial industry work to bring the benefits that PBR offers to its clients. A prime example of this is Treating Customers Fairly (TCF), which has proved a challenge for many firms, big and small. Therefore all regulatory consultants need to be able to apply this fresh thinking to their clients. The role of bodies like the APCC needs to be focused on developing its own thought leadership and internal training for its membership so that they can deliver these benefits to their clients. Otherwise the value of the advice will be based on the luck of the consultant you employ.

Jones concluded, “Being a small firm does not equate to being at a regulatory disadvantage. Those that are able to embrace the principles approach, particularly with regard to Treating Customers Fairly and demonstrate an adherence to the standards expected by the regulator, will be able to gain a first-mover advantage and have increasing confidence when dealing with the regulator”.

The anticipated FSA report on the status of the Principle-Based Regulation TCF will demonstrate which firms have implemented the right advice and who has made the mistake of interpreting TCF as merely another rule-based tick box exercise. Small firms need to act now and expect more from their advisors, particularly in terms of PBR, and ensure they act on advice that will bring real value and ensure that they meet FSA Threshold Conditions.


For further details of Huntswood's range of services, companies should visit www.huntswood.com

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For further information / file photography contact:

Catherine O’Neill
Huntswood Media Office
Direct Line: 0118 933 0148
Mobile: 0789 391 313
Email: coneill@huntswood.com


Notes to Editors:

Huntswood is a professional services organisation working within highly regulated industries such as Financial Services, Telecoms and the Public Sector providing Consulting and Customer Services.

This press release was distributed by ResponseSource Press Release Wire on behalf of Huntswood in the following categories: Consumer Technology, Personal Finance, Business & Finance, Computing & Telecoms, for more information visit http://pressreleasewire.responsesource.com/about.