FSA urges smaller firms to use new TCF self-assessment toolkit
Briefing Note 018/06
15 March 2006
The Financial Services Authority (FSA) has today launched an online self-assessment tool and urged smaller firms to use it to determine whether they are doing all they can to treat their customers fairly.
The tool is not a checklist, but is designed to indicate to smaller firms some of the areas on which they should focus in order to help ensure fair treatment of their customers. It comprises a set of questions relating to the structure, the sales process and the after-sales care of customers to prompt smaller firms to consider if they have fully considered how the FSA's Treating Customers Fairly (TCF) principles could be embedded into their business.
Sarah Wilson, the FSA's Director with responsibility for TCF, said:
"The FSA expects treating customers fairly to be business as usual for all firms regardless of their size. But we do recognise that smaller firms may need additional help in identifying the areas on which they should focus. We are asking firms' management to use to the tool to consider how their firm performs against each of the areas we have highlighted, and to take action where they see gaps in their business strategy, culture or processes. We shall be monitoring smaller firms' progress in embracing TCF and may wish to discuss this in detail with them in future. In the meantime, firms should act to reduce any risks to TCF that they discover."
TCF has a central role in the FSA's supervision strategy for smaller firms, and the regulator will continue to carry out thematic work to assess progress in this area. To help smaller firms implement and embed TCF into their business practices, the FSA will also offer special industry training and will continue to provide smaller firms with examples of good and bad practice on its website.
TCF Self Assessment Tool
Management Responsibilities, Strategy & Reporting
- How have you included TCF into the way you run your business and your firm's values
- How do you assess whether you are treating your customers fairly, and how is this reported to management?
- What gaps are there against TCF and how are these being filled?
- What changes could you make to your organisational structure or to services/products offered to support TCF?
- How are you engaging, motivating and training all of your staff on TCF?
- How does your firm measure the understanding of TCF by staff?
- How does your firm's management indicate their support of TCF?
- How is the requirement to treat customers fairly included in performance measures, objective setting and rewards for staff?
- How does your firm's record keeping enable you to demonstrate whether you have met your TCF obligations? How is that information shared with others in your firm?
Sales & Marketing
- How do you ensure you understand the product you are offering to your customers?
- How are your promotions targeted to make sure they are aimed at the right customers?
- What process do you have for approving a financial promotion?
- How are customer queries and complaints used to improve or stop financial promotions?
- How do sales people ensure customers understand the risk and limitations of a product as well as its benefits?
- What processes and checks are in place to ensure records are kept of discussion and communication with customers?
- How have your training and competency requirements developed to implement TCF?
After Sales Customer Care
- What steps do you take to understand, manage and, where appropriate, fulfil your customers' expectations of your firm after the point of sale?
- What do you do to ensure that service issues and claims are processed in a timely manner?
- How do you ensure that an effective flow of information to customers is maintained and recorded (including verbal discussions)?
- How does your firm identify trends and remedy issues arising from your handling of customer complaints that may indicate a wider or recurring problem?
- What targets do you set for people handling complaints?
- How are lessons from complaints shared between different business areas?
- What is done to ensure the outcome offered to customers is full and fair?
Notes
- The Treating Customers Fairly Self-Assessment Toolkit may also be accessed on the FSA website.
- The FSA Treating Customers Fairly web pages include access to speeches and other FSA publications on TCF, reports on the FSA’s TCF related work including the results of supervisory work undertaken with more than 80 firms in 2004/5 looking at the systems and controls they have in place in a number of specific areas of their businesses, and case studies examining what treating customers fairly means in a particular context.
- TCF training is now available from the FSA. Industry Training events for relationship-managed firms, based upon the material used to train FSA supervisors, are now available in London and around the UK. The FSA has published some of the material used on this course at TCF Training.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
- The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal, and improve its business capability and effectiveness.
