The deadline for implementing the FSA’s Treating Customers Fairly principles is just over two months away. Lesley Titcomb, director of small firms and contact, with a remit that includes insurance brokers, outlines how an ideal company might put the principles into practice.
Year one of the FSA’s three-year programme of Treating Customers Fairly (TCF) assessments of smaller firms – including a number of brokers – is drawing to a close, so it’s time to take stock. Although the FSA has yet to assess enough smaller firms to offer a broader picture of how many firms are treating their customers fairly, our model firm has good practice wisdom to impart gleaned from the areas we have covered so far: the North West, the West Midlands and Northern Ireland.
It is worth stressing that firms that treat their customers fairly also realise that this is good business practice. The examples reflect companies that have considered their customers at every stage of the business process – planning, training, selling and, crucially, ensuring customers understand why a particular product is right for them.
Of course, no two firms are the same. But I hope these examples help you to understand what the FSA means by TCF and to work through what it will mean for your firm.
TCF and business as usual
TCF is an ongoing process of change and improvement, so the firm produces an in-depth monthly report that records activities within each area of the business for senior management to act on. Senior managers take responsibility for creating the right culture within the firm and following this through. It focuses on the six consumer outcomes and pays particular attention to these when considering all aspects of its business.
Improved outcomes for customers
The firm believes in the need to investigate and rectify complaints quickly. It applies the same approach to all the feedback it receives. Customer feedback is sought in response to day-to-day business activities as well as complaints, cancellations and lapses.All customer feedback is logged and analysed against business processes. Trends and root causes are identified and discussed with all relevant staff. Decisions are then made on process improvements. Staff are trained on how to recognise and handle a complaint and intermittently assessed on the company’s complaint-handling procedures. Complaints information is revisited by a third party to ensure they are being dealt with without bias.
The benefits for the firm
Customers feel they are taken seriously. The firm can rectify and improve processes that may otherwise result in loss of business, such as lapsed policies or customers terminating relationships as a result of poor service. The firm can monitor trends in complaints about specific providers and give feedback to the provider. It tests itself on whether its processes and procedures are actually delivering the intended outcome by courting customer feedback and through internal monitoring of the business written.
What TCF means to the firm
The senior management can easily articulate what TCF means to the business. It believes success is rooted in building a strong culture that is focused on knowledge of both customers and the principles of TCF. The firm accepts that a risk is posed both to customers and the business if it does not consider the fair treatment of customers, particularly during the sales and after-sales process. The firm impresses on staff the difference between satisfaction and fairness. In monthly meetings, staff are asked to cite examples of behaviour that reflects TCF culture. There is an “employee of the month” award for those who go the extra mile for their customers and this includes TCF work. The firm is undergoing the Investors in People registration.
Good use of management data
The firm has collected a range of management information and uses all this data to identify and work through problems. The firm has a back-office system to deal with claims, complaints and feedback, and a robust file-checking system. This ensures the sales process is followed by all advisers and good and poor practice are identified. The management information is also used to identify trends and emerging risks to the business, for example, a snapshot of provider spread. When an adviser is doing well, he or she is monitored and used as a training aid for others who are either new to the business or who are not meeting the required standard.