The regulator carried out thematic work to review firms’ quality of advice process as part of its TCF initiative.
It visited 50 personal investment firms and mystery shopped 50 other firms between September and December 2007 as a follow up to work carried it out in 2006.
While the vast majority of firms were gathering relevant management information about their businesses, including Key Performance Indicators, the FSA said it was ‘disappointing’ that so many were failing to actively use it to review their advice processes.
It added many firms did not adequately consider findings from their review of customer files as part of their management information.
The FSA stated firms must have appropriate management information in place to test whether they are treating customers fairly by the TCF deadline of 31 March 2008.
To help small firms introduce management information into their businesses by the deadline, the Association of Mortgage Intermediaries (AMI) has published a practical TCF guide.
The guide has come as a result of the AMI TCF working party, of which the FSA has been closely involved. The group has developed four practical documents to help smaller businesses comply with TCF.
Richard Farr, director of the AMI, commented: “We fully appreciate that complying with FSA requirements can be a daunting process. This is particularly true for smaller firms who have found it the most challenging to introduce the required management information processes into their business.
"That is why we have developed simple, practical guidance that sets out clearly the thinking firms need to go through. Firms should realise that it is largely a question of interpreting information they already have in the context of TCF and not necessarily needing to go through a whole new process of data collection.”
