|
An Intermediary's primary responsibility is
to ensure that:
For advice sales:
It is important to note that this does not
imply that the FSA expects firms to take on the regulatory
responsibilities of other firms in the distribution chain. So on
the one hand an Intermediary would not be responsible for
unclear information in the Provider's literature. However, in
selling this product to a customer the Intermediary must
interpret the major points of the literature in a way that its
customers would understand.
The TCF exercise, which all regulated firms
should undertake, is essentially a "Gap Analysis". For the
purposes of this analysis Haven Risk Management has broken down
the FSA requirements into 6 key areas.
1. Senior Management Responsibilities:
The FSA have made it very clear from outset
that TCF is the responsibility of the firm's senior management.
It is not something that can simply be delegated to the
Compliance Department. When conducting an on site visit or one
of their pre-arranged telephone conversations, (which seem on
average to be lasting about 2 hours) they will always demand to
speak to senior management and will want to measure how that
management has embraced and implemented TCF principles into its
business.
Senior management must be the drivers of TCF in
any firm because TCF is more than just processes and systems. It
is also about culture and strategy. For many firms there may
need to be a radical re-think on how it does certain things.
This can only happen effectively if senior management are seen
to be fully involved and supportive.
2. Communication with Clients:
This is a core area of TCF. If a firm is
communicating effectively with it's clients a lot of other
desired outcomes result. The firm should ask itself: Do clients
clearly understand what it is the firm does? Do clients fully
understand what is being recommended to them and why?
It should be remembered that effective
communication is more than just making sure that literature is
compliant. It is also about how easy it is for clients to have
access to the firm, how quickly the firm responds to a client
and how the firm takes account of possible difficulties which
clients for their part might have, in communicating with them.
3. The Advice Process:
It should be the aim of every regulated firm to
ensure that the client achieves the service or product that is
appropriate for their needs and requirements. To achieve this,
firms should focus on working with the client to identify and
agree the right solution for their need, not the one that is
right for the individual adviser or firm. On occasions this may
mean recommending nothing.
It must be the objective of every firm, that
the client ends up with a product or service that they need and
understand and where they fully recognise and accept the risks
involved.
4. The Post Advice Process:
After a client has bought a product or service
the processing side of the business should kick in. It is
important for all involved to understand the importance of the
back office function and the role it can play in developing
client relationships. The back office staff are the ones who may
receive initial feedback from clients, determining whether or
not they fully understood what it was that they bought.
Back office staff are often the first point of
contact in respect of a complaint. How the client is dealt with
at this stage can be crucial to any ongoing relationship. They
can also be invaluable in providing management with information
on issues and trends which can then be used to improve the
services provided by the firm.
5. Disclosure and Payment for Services:
Customers can now deal with 3 basic types of
adviser: Tied, Multi-tied and Independent. It is important that
from outset the client fully understands who they are dealing
with, the services available and how the firm is to be paid.
Firms need to ensure that they are able to
offer payment options to suit the clients with whom they work.
These payment options must be fair and should show no bias to
any particular product or provider. Appropriate records need to
be maintained on how clients have paid for the relevant service.
6. Staff Competence:
In order to ensure that clients receive an
appropriate level of service it is important to ensure that all
staff – Advisers, support staff and management, are competent in
their roles. The firm should be proactive in encouraging
everyone to maintain appropriate levels of competence and where
relevant to develop these competences further.
A positive culture of personal and business
development can lead to positively motivated staff who in turn,
help deliver a professional service to clients.
In order to facilitate a proper and
effective TCF Gap Analysis, Haven Risk Management have developed
a TCF Gap Analysis tool. The tool has 34 sub-sections and
suggests 150 different areas that may be examined. The Analysis
then assesses each area on a traffic light system which leads
directly into an Action Plan. If this analysis is used
diligently with the complete involvement of senior management
then firms should not only comfortably meet the Regulator's
requirements but should also significantly improve the standard
of operations of their firms.
Please
contact us for further information.
|
