Support service provider Sesame Bankhall Group has launched a retail conduct risk assessment tool for advisers.
The tool is designed to help identify the main conduct risks in an adviser’s business.
According to SBG, firms document the actions needed to mitigate the possibility of poor customer outcomes in the future.
This document can then be retained to evidence to the FCA that their firm has considered conduct risk and acted accordingly.
Stephen Gazard, managing director of Sesame Bankhall Group, said: “The regulator has always been concerned with how firms conduct their business and in particular the way products are sold.
“However, with risk conduct regulation the FCA’s focus has shifted and intensified, becoming more intrusive to ensure that fair outcomes are delivered to customers.
“There is a greater requirement on firms to look at risk from the customer’s perspective and ensure that good outcomes are being delivered and evidenced – both now and in the future. It is important that firms factor this in to their strategy as their business model evolves.”
SBG draws a distinction between the principles of treating customers fairly and those of risk conduct regulation.
Whereas TCF is about mitigating known consumer detriment, Mr Gazard said risk conduct regulation puts greater emphasis on identifying risks that have not yet led to poor client outcomes but could in the future.