Sign of the times

Advisers who still operate a paper based back office could be caught out by the newly implemented treating customers fairly (TCF) regulations, experts say.

The rules, which require that firms be able to collect management information that proves that they are treating customers fairly, came into effect on 31 March. By the end of the year firms must implement all TCF procedures and be able to demonstrate that they are consistently adhering to the principles.

But experts believe that doing so will be a challenge for advisers who are not using a software based client relationship management (CRM) system. Recent surveys show that at least a third of advisers use no software solution.

Ian McKenna, director of the Financial Technology Research Centre, said that advisers who do not have CRM software would fall at the first hurdle of TCF if they use a manual system because they would find it difficult to collect and organise all of the necessary data.

Ann Dempster, managing director of CRM developer Plum Software, said, "It's much tougher to work with a paper based back office because advisers have to have the management information at their fingertips under the new TCF rules. With a manual system they will have to go back and forth to the filing cabinet to get the information."

geordie.clarke@ft.com