The FSA still has "some hard lessons to learn" if its plans to implement principles-based regulation are to succeed, AIFA warns.
It follows the regulator’s announcement on Monday that only 13% of larger firms met its March deadline for treating customers fairly (TCF).
The FSA says principles-based regulation “means focusing on the outcomes that really matter rather than on procedural box-ticking”, but AIFA says this approach has not yet gone as the regulator would have hoped.
“The information released from the FSA relates to a sample of relationship managed firms and does not cover small firms,” says Chris Cummings, AIFA director general.
“Although the headline figure states that only 13% met the 31 March deadline it is encouraging to note the FSA believe over 80% of firms will be capable of meeting the December deadline with a substantial and continued effort.
“These results show that the regulator has some hard lessons to learn in relation to implementing principals based regulation.”
Cummings points to AIFA research carried out prior to the March deadline, which suggested 87% of its members had begun implementing TCF.
He says it demonstrated that 40% were collecting and fully analysing their Management Information (MI) and that 47% believed they were well underway in embedding their MI work.
The survey also showed that 97% of AIFA members believe they have TCF embedded in their culture.
Despite the FSA results announced on Monday, Sarah Wilson, FSA TCF director, said: “[Although] these results show that adequate MI is not yet fully in place in the firms assessed – it does not mean that they are treating their customers unfairly.
“We now expect all firms to maintain their momentum and to undertake a significant amount of further work to meet the December deadline of demonstrating that they are consistently treating their customers fairly.”
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