Both senior management and smaller firms have been pinpointed by the FSA as falling behind in implementing the correct changes to adhere to the TCF rules.
In its paper 'Treating Customers Fairly - Building on Progress', published this week, the FSA found that industry has made progress in assessing, developing and implementing the fair treatment of customers, but there is more for the senior management of firms to do.
It said senior management need to ensure they have access to appropriate management information. Amongst the failings, it found not all management teams set the right tone for complaints handling.
The FSA also found progress in considering the implications of TCF and the changes required has been made fastest among the largest firms, with medium and smaller firms, although assessed on the basis of limited information, generally some way behind.
It also warned a small number of firms have yet to consider the implications of TCF in any detail.
The regulator will shortly be setting out its plans for simplifying the TCF Handbook to remove a significant number of detailed requirements and will be building TCF into its supervisory work.
Oliver Page, the FSA's director leading the TCF work, said: "We have seen examples of firms that have not gone much further than an initial consideration of how TCF works and, while we do not expect things to change overnight, we do expect senior management to take the lead and make practical changes."
Philip Ryley, head of financial services regulation at TLT Solicitors, commented: "The paper is not a new concept although it highlights some interesting topics such as realising the need to distance mortgages from other aspects.
"Enforcing the prospect of action if neglect from senior management towards clients continues is also mentioned and brokers will now be looking to AMI to give further guidance on the paper in their factsheets."
