Brokers likely to be surprised by FCA market study conclusions
The Financial Conduct Authority’s (FCA) ‘Wholesale Insurance Broker Market Study’, published earlier today, gave a positive assessment of the industry.
John Needham, a partner in PKF Littlejohn’s Financial Services team, said: “We suspect that a lot of brokers will be surprised by the clean bill of health given by the FCA and its decision to close its market study. Many brokers expected the review to result in the regulator intervening in what they perceive is an unbalanced market.
“Despite the FCA’s positive assessment of the industry, brokers can expect the regulator to continue to focus on the specific areas that it has highlighted in the report. In particular, issues such as conflicts of interest and broker remuneration dovetail with the new Insurance Distribution Directive (IDD), so it’s unlikely that these will drop off the FCA’s radar.
“It will also be interesting to see if one of the unintended consequences of the report may be growth of ever more innovative non-placement-based commissions.
“Forward-thinking brokers will also pick up on some of the valuable insight into the London market that’s contained in the report and use it for benchmarking and other internal analysis.”
Please send John Needham an email, if you would like to continue the conversation about this study.