Senior Management Dragging Heels Over TCF Initiative, Says FSA

by Robin Pilgrim, LawAndTax-News.com, London

14 November 2006

One third of delegates at last week's FSA conference: 'Treating Customers Fairly, Towards Fair Outcomes for consumers' responded that the biggest barrier to implementing Treating Customers Fairly within their firms was lack of buy-in from senior management.

According to the Financial Services Authority, the following questions were posed to the more than 400 delegates who attended the conference:

What do you think will be the biggest barrier to implementing TCF in your firm?

• Senior management buy-in: 33%
• Cost: 11%
• Quality of staff: 23%
• Regulation: 10%
• Other: 23%

When asked how far their firms had progressed with TCF, the responses were as follows:

• Aware: 8%
• Strategy and Planning: 26%
• Implementing: 44%
• Embedding: 22%

The FSA stated that:

"This reinforces the point made in the FSA's progress report in July which found that, in spite of clear evidence of commitment, senior management aspirations had not yet fully permeated through businesses to result in improved outcomes for customers."

Addressing the conference, Clive Briault, Managing Director of the FSA's Retail Markets department, said that firms and their senior management now needed to push on with their own Treating Customers Fairly initiatives, and measure the impact on consumers.

"We want firms and their senior management to drive through and demonstrate achievement of the six TCF outcomes."

"We want to maintain and increase momentum to deliver the consumer outcomes through the firms we regulate, by regulating those firms in a more principles-based way. Together, we can make a real difference to the consumers of financial products and services.".

The six outcomes for consumers were published in the FSA's Treating Customers Fairly progress report in July, and are that:

• Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture;
• Products and services marketed and sold in the retail market are designed to meet the needs of identified groups of consumers and are targeted accordingly;
• Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale;
• Where consumers receive advice, the advice is suitable and takes account of their circumstances;
• Consumers are provided with products that perform as firms have led them to expect, and the associated service is both of an acceptable standard and also as they have been led to expect; and
• Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

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