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Aifa demands more clarity as 87% miss TCF deadline

Aifa has called on the FSA to give more guidance to advisers over treating customers fairly after only 13 per cent of bigger firms met the March deadline.

The FSA’s TCF update, released this week, shows that only 13 per cent of relationship-managed firms met the deadline which required them to have management information in place to test the effectiveness of their TCF systems.

However, the regulator says many firms have invested “significant time and energy working to measure TCF” and it still expects that 80 per cent will meet the December deadline of being able to demonstrate they are consistently treating their customers fairly.

The FSA says it will take “tough action” on the worst-performing firms, including enforcement action and increased penalties such as requiring firms to hire external consultants.

It will undertake assessments between January and June 2009 of relationship-managed firms and TCF assessments will form part of the regulator’s Arrow visits. It will also use other external sources which could include trade body surveys. Results of this work will be published in September 2009.

Director of treating customers fairly Sarah Wilson says: “We now expect all firms to maintain their momentum and to undertake a significant amount of further work to meet the December deadline of demonstrating that they are consistently treating their customers fairly.”

Aifa director general Chris Cummings says it is surprising that so many relationship-managed firms, which have the benefit of regular FSA dialogue, failed to meet the deadline.

He says: “What does that say about TCF as a regulatory initiative? The FSA has not been clear about what it is looking for from firms but it is not too late for small firms to get engaged with the process and use the good practice notes that Aifa has published to meet the December deadline.”

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