The regulator is aiming to include the assessment of firms’ effectiveness in treating customers fairly as a systematic component in its ARROW assessments from 2005.
Ray Boulger, senior technical manger at Charcol and deputy chairman of the Association of Mortgage Intermediaries (AMI), said the trade body was concerned these rules could instigate regulatory creep.
“The whole concept of the TCF assessments are they enable the FSA to decide there may be other best practices which firms should be abiding by, which aren’t necessarily in the regulator’s rules,” said Boulger.
“The danger is if one firm is doing something one way and the FSA deems this a good idea but another firm isn’t carrying out the same practice. The regulator could come down heavily on the latter,” he added.
Stephen Atkins, managing director of the Freedom Network, agreed. “The FSA needs to clarify how far the line has moved and what impact the TCF rules will have on the advice brokers give to their customers,” he said.
Jackie Blyth, spokeswoman at the FSA, said: “We do not see this as regulatory creep. We want to make sure a good and fair relationship is established between the adviser and customer throughout the lifetime of the product.”
