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FSA fails to meet its customer objectives

Just under a year ago, AM featured three surveys looking at the impact of the Financial Services Authority’s new regulations governing the sale and advice of insurance-based products in the automotive sector.

Often described by critics as “a sledgehammer to crack a nut”, the cross-industry rules saw retailers fall into the same category as other providers of insurance products, such as the financial services and banking sectors.

Consequently, it came as little surprise to find that just under half the businesses surveyed last time had not signed up to the FSA rules and, of those that had, just 23% said they definitely would again when the next annual fee was due.

That was in July. Fast forward to summer 2006, and the picture has changed somewhat. According to an AM FSA survey in conjunction with Black Horse Motor Finance, 81% of the 131 retailers who responded are fully approved by the FSA, 5% are authorized representatives, 2% are split between being an AR for warranty- only products and being an introducer, and just 16% have decided to stop selling and advising on insurance-based products. The reason? Half state workload required to be approved, a third cost and 25% time...(Continues in AM June 30 edition)

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