The FSA has warned firms that outsourcing functions is not synonymous with outsourcing potential lia...
The FSA has warned firms that outsourcing functions is not synonymous with outsourcing potential liabilities.
FSA policy adviser Simon Ashby believes a strong initial contract and ongoing partnership are vital components of a successful outsourcing deal.
The current regulatory stance with regard to outsourcing is in a guidance capacity rather than actual rules and Ashby said the FSA has no desire to become more prescriptive in this area as things stand.
While prepared to leave it to individual companies to oversee their own outsourcing agreements, the regulator feels the general situation needs to improve to prevent any future controversy.
'Our basic advice to companies setting up any sort of outsourcing agreement, ranging from back-office support to fund management, is to get a good contract in place that includes an adequate service level agreement and termination rights,' Ashby said.
'We have also found that when companies outsource an element of their business, many tend to leave everything to the outsourced service provider rather than work as partners to get the best from the arrangement.'
Questionnaires sent to firms
Expecting to recover around £200m
Financial regulators renew anti-pensions scam campaign
Our weekly heads-up for advisers