Laying the foundations

Starting off with the basic premise that no financial services firm is perfect, but all are striving for perfection, treating customers fairly is something that all should have as a central pillar for their business model.

This year we have seen the FSA fine a number of financial advisers, mortgage brokers, insurance companies and others in the industry for failing to treat customers fairly. In the last month alone this has included an £840,000 fine for Liverpool Victoria Banking Services for mis-selling single premium PPI, a £735,000 fine for Hastings Insurance Services, several fines for mortgage brokers, the banning of a financial adviser coupled with a £16,000 fine for the inappropriate sale of high risk shares to customers.

It may be stating the obvious but such action would not be necessary if individuals had achieved reasonable levels of understanding of the principles and practice of TCF.

There appears to be lots of confusion when it comes to reaching this basic level of understanding. How can such an understanding of TCF principles be achieved, some have absurdly stated that it is such a vague concept that it is impossible to understand. This is simply not true.

First, the FSA has defined six consumer outcomes, which explain what it wants TCF to achieve for consumers. For example, one of these outcomes is that products and services marketed and sold in the retail market should be designed to meet the needs of identified consumer groups and are targeted accordingly, seems pretty clear and unambiguous to me. These outcomes are freely available to all on the FSA website.

Another way in which an understanding of these issues can be achieved is to gain an appropriate qualification in this area.

For example, our Certificate in Regulated Customer Care not only provides formally assessed knowledge and understanding of the principles and practice of TCF, it also serves as useful evidence of the action taken to embed TCF at all levels in an organisation, particularly useful for an FSA visit.

Until all financial firms wake up to this fact, as many thankfully have, the FSA will rightly continue to take robust action.

One particular area of concern for financial advisers, in relation to TCF, is data security. Earlier this year, the FSA urged firms to change their attitude to data security following a review of systems and controls for data security at a number of firms including banks, building societies, insurance companies and financial advisers.

Philip Robinson, FSA Director for Financial Crime and Intelligence, said: "Customers have a right to be confident that firms are doing everything reasonably possible to keep their personal and financial details safe.

"Some firms have made progress by adopting good practice while others need to do more in this area to ensure that they are treating their customers fairly. Firms getting data security right is a key priority for the FSA and we expect the industry to raise its standards."