Creating a culture of fairness in customer treatment is not just a regulatory requirement; it’s a cornerstone of trust and integrity for firms in the financial services industry. Firms seeking authorisation from the Financial Conduct Authority (“FCA”) or already authorised firms must demonstrate and continue to show that a commitment to fair customer treatment is paramount.
The FCA has outlined six key consumer outcomes that serve as a benchmark for fair treatment:
- Confidence: Customers should feel confident that they are dealing with firms where fair treatment is central to the corporate culture.
- Suitable Products: Products and services should be designed to meet the needs of identified consumer groups and targeted accordingly.
- Clear Information: Customers must receive clear information and be kept appropriately informed before, during, and after the point of sale.
- Suitable Advice: Where advice is provided, it should be suitable and take account of customer circumstances.
- Performance Expectations: Products should perform as firms have led customers to expect, and the associated service should be of an acceptable standard.
- No Unreasonable Barriers: Customers should not face unreasonable post-sale barriers to change products, switch providers, submit a claim, or make a complaint.
Firms seeking FCA authorisation
To meet these outcomes, firms seeking FCA authorisation should integrate fairness into their business model. This involves designing products with the end-user in mind, ensuring marketing materials are honest and straightforward, providing training to staff to ensure they understand the importance of customer fairness and establishing processes to review and improve customer service continually.
In addition, firms seeking FCA authorisation should be able to demonstrate their commitment and provide evidence of their fair treatment of customers. This can include practices on how customer feedback will be obtained and how it will be used to improve their services.
The FCA places particular emphasis on the fair treatment of vulnerable customers. Firms should be able to identify signs of vulnerability and respond with appropriate support, train staff to handle situations involving vulnerable customers with sensitivity and offer products and services that cater to the needs of vulnerable individuals.
Stay Flexible and Responsive
The financial landscape is ever-changing, and firms must be adaptable to continue providing fair treatment. This means authorised firms should keep abreast of regulatory changes and industry best practices, be responsive to unforeseen events that may impact customers and offer flexibility in solutions when customers face difficulties. The FCA places special emphasis on the fair treatment of vulnerable customers. Firms are encouraged to understand the needs of these customers and ensure that they are not disadvantaged due to their circumstances.
By prioritising the fair treatment of customers, firms not only align with FCA’s regulations but also build a reputation for reliability and integrity. This approach fosters long-term customer relationships and positions a firm as a trustworthy player in the financial services market.
Authorised firms must not only comply with these principles but also be able to demonstrate their compliance. This includes maintaining records, conducting regular reviews, and adjusting practices to ensure continuous improvement in customer treatment.
How can Complyport help you?
Complyport, with its deep expertise in the regulatory sector, is positioned to guide firms through the complexities of fair treatment.
Achieving fair treatment is not a one-time compliance exercise but a continuous commitment.
Support for Authorised Firms
If you are an already established firm under the FCA, our expertise will allow us to review and adapt your existing policies to reflect everyday changes in regulatory standards, market conditions, as well as customer expectations, and therefore maintain compliance in accordance with FCA standards. Treating customers fairly is more than a regulatory obligation, it’s a commitment to excellence and integrity. By embracing the FCA’s guidelines, firms can build stronger, more resilient relationships with their customers, fostering trust and loyalty that endure.
Support for Firms Seeking Authorisation
If you are a firm that is not yet authorised, Complyport’s team of experienced consultants can assist your firm in building its internal policies, procedures, and cultures around the FCA’s principles. Complyport will ensure with its expertise that fair treatment is embedded at the heart of your business model, giving you a competitive edge by establishing strong foundations of trust and customer loyalty from the start.
It is important for all firms to remember that treating customers fairly is not a one-time checkbox but a continuous commitment that shapes every aspect of your operations.
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About Complyport
Complyport is a market-leading consulting firm supporting the UK financial services industry for over 22 years. We specialise in providing Governance, Risk and Compliance services to support the regulated financial services industry to raise standards and thrive.
Complyport can assist with the preparation of a GAP analysis and impact assessment on the investment firm’s capital adequacy and risk management framework of the Company under the regulatory framework.
We specialise in supporting the UK financial services industry with compliance guidance, advice and best practice.
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