Britain’s Institute of Insurance Brokers (IIB) has spoken out strongly against proposed “well-intentioned reforms” that it says will burden brokers and other intermediaries with more regulation, higher compliance costs and more demands for compensation.  

The blast is contained in a response to the UK Treasury and regulator the Financial Services Authority (FSA) on the subjects of Reforming Financial Markets and the Retail Distribution Review.

The IIB says insurance brokers, by implication, will continue to pay towards compensation for unrelated financial institutions under the Financial Services Compensation Scheme model.

It says the banking sector, in particular, should be self-reliant.

The institute is also concerned that brokers and intermediaries who offer short-term protection in return for a set payment could be compared with the retail investment market which is long-term and speculative by definition.

CEO Barbara Bradshaw says that while the Retail Distribution Review does not relate to general insurance, brokers are nervous that the proposals regarding remuneration and independence might be read across boundaries. 

“Does the FSA want to drive us into an environment where professional advice is the preserve of the well-off and fraught with even more caveats?” she said.