Outcome 4 of Treating Customers Fairly requires that, where clients receive advice, the advice is suitable and takes account of their circumstances.
The apparent simplicity of this statement is very misleading.
The guide for small FSPs contain the following questions to assist you in better understanding of what is required from you.
- Did you conduct a suitability analysis in terms of section 8 of the General Code of Conduct (GCoC)?
- Did you check the client’s needs against the recommendations?
- Does your record of advice comply with the GCoC and contain all required disclosures?
- Do you consider all requirements relating to replacement products?
Having passed your level 1 regulatory exam, you of course know exactly what is contained in section 8 of the GCoC, including the requirements for replacement policies, or switching your book from one insurer to another.
If not, you may just want to have another quick look, and, where applicable, share it with your staff. In terms of being able to provide proof that your personnel were informed of the requirement, you may even consider documenting the event.
More records are better than less, believe me.
An often overlooked requirement is contained in the above-mentioned section 8 – the client’s financial product experience. Using a “bull-dust-baffles-brains” approach may lead to a quick sale, but certainly does not ensure that the client understands the advice and places him or her in a position to make an informed decision.
For most of us, it is difficult to break habits built up over many years. The fact that you are still in the industry is actually proof that you have been good at treating your customers fairly.
All that is possibly required is fine-tuning what you are already doing.
TCF – Guidance for small FSPs/ Independent Financial Advisors (IFAs) and
