Seeing the cultural light

It is true to say that the Retail Mediation Activities Return asks only for details of complaints rather than positive service endorsements but, bearing in mind the FSA statutory obligation to protect consumers, its main focus has been previously on how firms deal with customers when things go wrong.

However, I am pleased to say that the tide is turning. As part of the new FSA requirements on management information that support firms' Treating Customers Fairly performances, recording positive feedback is of at least equal importance.

Most intermediaries will be able to give a fairly accurate approximation of their renewal retention rates, but fewer will have similar confidence in the sources of their business. Yet, what could be a more positive TCF message than a firm sourcing 75% of its new enquiries by recommendation and retaining 90% of its existing clients?

Good management information can, of course, not only provide evidential support for firms' beliefs regarding their performances, but also give an early indication of where the firm may not be meeting its own, or its customer's, expectations.

Although some intermediaries are still struggling to make sense of how they might meet the new TCF deadlines, it is the firm's culture that lies at the heart of the issue. Three years into FSA general insurance regulation, it is more essential than ever that firms' senior management and leaders actively 'buy-in' to the aims of the regime for themselves and also provide a positive inspiration to their staff in their behaviour, attitudes and values.

Unfortunately, there are still numerous owner-managers of small intermediaries that are too busy complaining about the FSA's rules to achieve this cultural change, and they don't appreciate the negative impact that this attitude has on their staff.

Finally, remember that Sarah Wilson, director for TCF at the FSA, indicated recently that firms rising to the challenge successfully will benefit from "a regulatory dividend", but where a firm fails to take its obligations seriously "you will face more regulatory intervention".

Ian Ritchie, Director, RWA Group.

WHAT IS EXPECTED

More information on the cultural outcomes that the FSA expects from implementing TCF is available at www.fsa.gov.uk/pubs/other/tcf_culture.pdf. Firms using compliance consultants should by now be receiving guidance on how this will be incorporated into their businesses.