News Article - 31 January 2008
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Small businesses in the UK are failing to heed the advice of compliance consultants, a recent study has claimed.

According to the survey by the Financial Services Authority (FSA), these smaller firms should act on the guidance they are given if it will help them to comply with regulatory rules.

The FSA conducted research earlier this year and in 2006 to study the effectiveness of consultants used by companies.

Early on in 2007, the body visited 22 small firms using consultants and found that almost half had not managed to overcome their weaknesses.

In addition, more than one-third were seen to not have acted on recommendations from consultants which would have helped improve their regulatory stance.

Jonathan Fischel, the FSA's head of compliance in the small firms division, said: "Firms should always take appropriate action to be compliant.

"They cannot contract out their regulatory responsibilities and they should not assume they are fully compliant just because they employ consultants."

Spokesperson for the Association of Independent Financial Advisors, Fay Goddard, told the New Model Adviser News that it was questionable that companies should pay for the advice and then not implement it.

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