Click here to view the FSA Countdown article featured in the April 23 issue of AM
Why you can't ignore the FSA
F&I sales account for half the profits at the average dealership. Can you afford not to become FSA authorised, asks Stephen Briers, AM editor, introducing a new must-have supplement
"The insurance and financial services sector is heading for its biggest shake-up ever with the introduction of the FSA regulations. That's great news for dealers. Although they will need to invest in becoming authorised, costing time and money, it will improve the way they sell insurance-based products, giving the consumer greater reassurance and increasing their loyalty to the dealership. The benefits significantly outweigh the negatives.
Take finance, for instance. It already accounts, on average, for half of dealer profits, but penetration rates are often poor because sales staff do not have the skills and knowledge to sell the products adequately. High Street lenders currently have the edge – customers trust their brands – and they have taken a substantial slice of the market.
The FSA regulations will give retailers real credibility and a chance to fight back. It will help to clean up the industry's image, force out sub-standard vendors and enable the professional operators to win more business. Consumers will be told by the FSA about the new authorised rules and compliant retailers can feed on this positive publicity.
The switched on retailers will use it as an opportunity to become consumers' champ-ions, promoting the fact that they are FSA compliant in their advertising. It will give them the edge over their rivals – a real USP.
At the moment, however, it seems that too many dealers have fingers in their ears – they believe if they ignore the regulations, the FSA will go away.
The General Insurance Standards Council is partly to blame for this. It tried to implement something similar (Rule 42) in 2001 with considerable fanfare but was stopped at the 11th hour by the Competition Commission. Some dealers feel this will happen again: they are wrong.
The FSA is a Government body and the regulations are backed by UK and European legislation – the Government has a legal obligation to introduce the directive into UK law by January 14, 2005.
You need to start work now by developing training and filling in the application forms. The FSA only guarantees that applications received by July will be processed in time to meet the January deadline.
These regulations should be the catalyst to a major culture change in the financial services industry. Embrace it or lose out."
NOW BUY YOUR COPY OF 'OUT OF BUSINESS: CHANGES YOU CAN'T IGNORE'
The FSA supplement costs £10 per copy. To order a copy call Helen Bateman on 01733 468259 or email firstname.lastname@example.org.
Payment can be made by credit card or cheque made payable to Emap Automotive Ltd.
Topics covered in 'Out of business: changes you can't ignore'
FSA regulations explained
Retailers need to take the Financial Services Authority rules seriously – or face the possibility of a two-year jail term
'We will not bail you out'
Providers of insurance-based products want retailers to become fully authorised by the FSA, rather than appoint approved agents
Case study: CD Bramall
How one of the UK's leading dealer groups is preparing for the FSA regulations - the costs, the timing and the perceived benefits
Is opting out an option?
AM looks at how a mythical AM100 dealer will lose out if it decides not to become authorised to sell insurance products from 2005
Why become authorised?
The people behind the regulations explain the authorisation process, the implications of changes, and the deadlines
FSA welcomes applications
FSA announces final changes to the new regulations and accepts applications
What the carmakers are doing – and in some cases not doing – about FSA compliance.
Face up to training
Each authorised retailer needs fully trained staff – find out what you need to do and which companies can help you through the process