A survey amongst FSPs would very likely reveal a “wait and see” approach from the majority of smaller businesses as far as Treating Customers Fairly is concerned. Many of those who adopted a similar stance when FAIS was first introduced found out the hard way that ignorance is, indeed, not bliss.
We will be focusing on this important issue over the next few weeks to help you understand what you are required to do. Most of the information we intend using comes directly from two FSB publications which we will link below.
Outcome 1
Clients are confident that they are dealing with FSPs where the fair treatment of the client is central to the FSPs culture.
Here are some of the questions listed in the guidelines for you to consider:
- Have you thought about TCF and how you treat your clients?
- If you are your own client, would you be happy with the way you are treated?
- Do you and your staff talk about the treatment of clients, and do you have an unified approach?
- How do you currently comply with section 2 of the General Code of Conduct? This refers to the requirement to “…at all times render financial services honestly, fairly, with due skill, care and diligence, and in the interests of clients and the integrity of the financial services industry.”
- Do you do a due diligence on other businesses before contracting with them?
Unfortunately, saying “Yes, I did think about it” will not suffice. The FSB wants FSPs to demonstrate the effectiveness of fair treatment principles, which will require some more paperwork.
This will include a documented TCF policy, a review of your current procedures, including your risk management plan. Do not be surprised if a question or two on this is included in future compliance reports. You are also likely to be questioned on this in the event of an on-site visit.
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