TCF compliance - Sorting out paperwork

The service that you provide, coupled with the customer feedback that you receive, gives a compelling picture of the firm's aims in its treatment of customers. The solution may in providing appropriate evidence from existing activities.

The FSA has stated clearly that they expect management information regarding Treating Customers Fairly to be relevant to the size and risks in the business and that it does not necessarily need to be separate data or labelled specifically as TCF MI. What it does need to do is evidence, in a measureable way, is that the firm is achieving the desired outcomes from its policies and procedures.

Firms seeking guidance from external compliance consultants are sometimes frustrated to find that there is no hard and fast, one-size-fits-all solution. The tip is to look at what the individual firm does and whether or not it records this currently in a way that demonstrates it is achieving its aims.

For example, FSA TCF consumer outcome one states: "Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture." The emphasis here is that the consumer must be confident rather than the firm, and in many cases brokers have still to look at what they do from the customer's perspective to see how they are performing.

If the customer is being provided with clear details of the broker's service and receives an explanation of the main characteristics of the cover, as well as being told how to complain if there is a problem - and all in a clear and understandable way - then the customer should be confident that they have been treated fairly. Therefore, the procedures, training and documentation that enable the firm to do this consistently are the operational measures by which the firm can demonstrate adherence to TCF outcome one.

The strategic MI that supports this could be that the documents and procedures are reviewed regularly by the senior management, that the staff is able to demonstrate ongoing training and assessment, that files are monitored to ensure procedures are followed and, of course, an analysis of any complaints received.

Probably none of the strategic MI is new, yet by ensuring that information is collated and reviewed by the senior management team, the firm should be able to evidence that the FSA outcome is being achieved in a measureable way. Looking at the data is key to success, as trends that could flag a reduction in the company's standard must be identified and rectified; no one wants the FSA to spot a problem in their company that they are not aware of, do they?

- Jim Dart, director, RWA Group.