Well, we can no longer leave implementing the Financial Services Authority’s (FSA) ‘Treating Customers Fairly’ (TCF) initiative until next year, in the words of Elvis, ‘it’s now, or never’.
At a conference I attended in November, the regulator urged us all to up the pace of implementation, renew our enthusiasm and effectively embed or else. The clock is now ticking and the 31 March deadline is approaching fast.
With all the turbulence in the financial markets, this is one more concern for intermediaries to address; one that has specific deadlines, and one that is not subject to speculation.
We can’t say we haven’t had enough notice, and now the first deadline looms large.
The heart of your business
On 31 March, all regulated firms, and indeed any firm that really places the FSA’s principles at the heart of their business, need to have management information in place that can measure the impact of TCF.
While this sounds like a significant piece of work for any small intermediary firm which does not have the resources to call on, it may be that they may simply be ignoring the easy options.
The management information requirements from the FSA can be translated into a number of definitions, but what makes it really valuable to the business?
At the end of the day, management information allows the business to make decisions on its future based on data that is accurate, timely, relevant, consistent and able to be recorded easily.
Meeting the FSA’s requirements
The management information you need will, on most occasions, be regular reports that allow you to identify trends and problems. For example, you will be able to look at complaints and identify trends that could impact on the service and advice your customers are receiving.
What you have, or intend to put in place, must allow you to measure your firm’s ability to meet the requirements of the FSA’s six customer outcomes and more importantly satisfy the requirements of your clients.
You will need to be able to demonstrate that your firm has the right internal processes and culture to put the customer at the heart of your business and that the advice you give your clients is suitable, with the products you recommend matching their expectations. Your clients must understand your advice and know why they have bought the products you recommended.
They should know that you have made every effort to find out the full picture of their circumstances and that your advice has been appropriate. Finally as part of your research process, you must have kept up-to-date with the performance of the products you have sold.
If there is a fundamental change, then you must show you have returned to the clients who have these products to offer alternative financial solutions and ensured complaints are monitored on a regular basis, acted upon within acceptable timescales and used to improve service levels.
An important role
This is by no means an exhaustible list to fulfil your TCF requirements, but management information will play an important role in embedding the principles-based regulation into your business.
So as the New Year starts and the deadlines come into view, now is the time to make sure your New Year resolutions include being able to measure that you are treating your customers fairly.
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