• Haven Risk Management

Treating Customers Fairly – TCF

The FCA no longer carries out TCF specific visits, however this does not mean that they no longer think it is important. It does mean that by now they expect the principles of TCF to be embedded in all firms and to be the bed rock of their business models. The principle is to ‘put the customer first’ in everything which we do. Therefore, if during a visit or an interview they get the impression that TCF is no longer a priority, they will certainly investigate further and this is where you will need FCA compliance consultant by your side.

TCF applies to both Product Providers and Intermediaries. Broadly, the Regulator intends that:

Product Providers should ensure that:

  • their products are appropriately designed for the target market
  • the marketing material is clear, fair, not misleading, and likely to be understood easily by those reading it
  • the product should perform according to the expectations given

An Intermediary’s primary responsibility is to ensure that:

  • the customer has all appropriate information in an understandable format

For advice sales:

  • the clients’ attitude to investment risk and capacity for loss has been properly established
  • the product is suitable for the customer
  • the product is affordable
  • the post sales service meets the expectations created

The TCF exercise, which all regulated firms should undertake no less than annually, is essentially a “Gap Analysis.” For the purposes of this analysis Haven Risk Management has broken down the FCA requirements into 6 key areas:

  1. Senior Management Responsibilities
  2.  Communication with Clients
  3. The Advice Process
  4. The Post Advice Process
  5. Disclosure and Payment for Services
  6. Staff Competence

In order to facilitate a proper and effective TCF Gap Analysis, Haven Risk Management have developed a TCF Gap Analysis tool. The tool has 46 sub-sections and suggests 162 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.

We operate a range of FCA Compliance Services. Please contact us for further information.

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