Planners with high recurring income have little to fear from looming Treating Customers Fairly (TCF) legislation, but advisers relying mostly on commission may face a harder task in meeting the new rules, according to Phil Young, partner at support services provider threesixty.
Threesixty is to run TCF workshops throughout January and February in a bid to get all its client firms up to speed on TCF, and Young claimed that advisers with high recurring income were likely to find they were furthest down the line towards meeting the regulations.
‘With clients looking towards more recurring income, the focus on TCF is easier to align with ongoing servicing than if they are based purely on new business,’ he said.
‘If you have a small number of clients and you treat them in a high maintenance way, whether you are treating customers fairly is probably going to be more apparent to you,’ he said.
Advisers running a more transaction-based business could struggle to provide similar levels of evidence for their TCF compliance due to less customer feedback, he argued.
The new batch of TCF workshops follows similar efforts from threesixty in 2006 and 2007, and will inform firms of some of the lessons learned from previous meetings.
After running the workshops threesixty provides firms with a questionnaire for clients and staff, and draws from the results a TCF action plan.
‘What we found before we started running these workshops was a lack of understanding as to what was required – it was perceived as a vague concept,’ said Young.
‘We’ve found IFAs need hands-on detailed assistance.’
The Financial Services Authority expects all firms to have the necessary management information in place to be able to record and monitor TCF by March and by December it expects them to demonstrate with evidence that they are treating customers fairly.
But Young said that threesixty firms attending the workshops for the first time hadn’t left it too late to comply.
‘TCF is an ongoing process – the deadlines are to meet the minimum requirements, and all our firms should hit those without trouble,’ he said.
Source: Citywire |
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