Financial services

TCF requirements not being met

17 March 2008

Many brokers still don’t have systems capable of testing their compliance with Treating Customers Fairly (TCF) requirements, according to data management specialist iiCon. The warning follows concerns expressed in a Financial Services Authority (FSA) newsletter to financial advisers, highlighting the need for further improvement ahead of the March TCF deadline.

The FSA suggests that around one-third of brokers still need improvements to their systems. At present, even those brokers who submit applications online will only store 50 per cent of their client communication, with the rest being provided verbally face-to-face or over the phone, or in e-mail correspondence which is rarely reconciled to the client’s file.

iiCon warns that very few brokers have centralised records that capture, collate and manage data in a way that allows for analysis and management information across all written forms of communication, including e-mail correspondence. Even fewer have the capacity to record, store and analyse client conversations.

“The FSA is leaving no doubt as to the importance of TCF in its eyes,” said  Ross McAdam, director of iiCon. “In the past, for most brokers the ability to store all client contact was unrealistic. An average face-to-face consultation lasting two hours would typically require over 16 pages of typed text to record verbatim, and any subsequent phone queries would also need to be recorded.

“However, we are now seeing technology that can offer 100 per cent data capture at a minimal cost. So much client contact now takes place away from the traditional face-to-face interview. Brokers must ensure they capture everything, or they are placing themselves at risk.”