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FCA assessments

This new supervision process for smaller firms which will look at how you identify and take steps to prevent the potential risks within your businesses. It is the FCA’s intention that all directly authorised mortgage brokers will be involved over the course of the next four years and this section will help you understand the process and what to expect.

A key aspect of this new supervision process is the introduction of a ‘Proactive Regulatory Review (PRR) which is preceded by all firms attending a Business Risk Awareness Workshop on ‘Governance Culture and Controls’ (GCC). The review will focus on five key areas:

  • Business Model – How does your business work? What products do you sell, how many advisers are involved, what fees to you charge etc.
  • Management – who is responsible for compliance around the sales and advice process?
  • Controls – evidence of embedded TCF practices, appropriate MI, training and competency
  • Prudential – what is the financial structure of your company and how do you manage risk and liabilities such as capital, liquidity, complaint handling etc.
  • Environment –your area of operation for example whether you are a broker, IFA, stockbroker etc.

How does the review process work?

The review will involve 3 stages:

Stage 1 - Business risk awareness workshops
These will be held around the country, going from region to region over the next 4 years. The programme started in the northwest at the end of 2011

Stage 2 - Regulatory reviews
These will take place three months after the workshops. These will be used to find out more about the risks in your firm and how you deal with them.

Stage 3 - Follow-up work
Not all firms will have follow-up work, but if you do this will take place soon after your review


.