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FSA must understand consumer needs to regulate TCF, says Brandspeak

The FSA must come to grips with the lack of consumer understanding of financial products and literature before it can adequately regulate TCF, according to financial services consultancy firm Brandspeak.

Research conducted by ICM for Brandspeak shows that every second consumer signs forms stating they have read and understood terms and conditions when they have not.

Brandspeak says providers must produce literature that is no more than two and a quarter A4 pages in length and reading time should not exceed 25 minutes.

The research shows that when consumers fail to understand literature and don’t ask for clarification 22 per cent say it didn’t seem important.

Sixteen per cent say they didn’t believe they would understand it even after further explanation, 14 per cent didn’t want to appear ill-informed and 13 per cent didn’t feel they could ask their adviser to explain.

Brandspeak director Jeremy Braune says: “Providers, in their efforts to cover all the regulatory bases, generally bombard the end customer with product information, which rather than empowering them turns them right off. The question then is in doing so, are customers really being treated fairly?

“Based on what this research exposes we would argue that the very first step to ensure customers are genuinely treated fairly is for the regulator to acknowledge that half the UK’s adult population really struggles to get to grips with even basic product information as it is currently presented. For providers is means working back from what the average customer realistically is prepared to digest and produce product literature that will actually get read.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. FSA must understand consumer needs to regulate TCF, says Brandspeak
    It might well help everyone immeasurably if the FSA could understand the way the real world works instead of trying to impose its own cloud cuckoo land idea of Utopia. Oh yes ~ and stop ripping us all off in the process. And get its own house in order. And…….

  2. TCF conflicts
    I have to agree with the logic of the comments here. For some time now I have raised the issue with the compliance dept that the needs of the industry (and the FSA) to protect itself from accusation of poor advice as taken over from the need of the client to understand. The typical retirement report or pension transfer report is a good example. I seriously doubt that any clients would read and digest the report from end to end especially the technical points. Then there is the needs to repeat most things two or three times whether it is the report, the quotation and the brochures, etc. TCF does not fit with a tyipcail retirement or pension transfer report well and needs to be more streamlined and focused for the client. There are numerous other examples of the bureacracy conflicting with the clients protection.

  3. The Police were forced to bring in PACE and recording
    As the paper records were proven NOT to always match what had taken place in the interview room with those entrusted with applying the law. Why should this be any different with the F-pack and with advisers or are they saying that the Police (who I think do a very good job) have more bad apples than the FS industry?
    Our solution as a firm was to reduce the amount of undread paperwork issued to a client as well as the number of things we expect them to sign so that they and we can focus on what the client is TOLD, what their responses ARE, the INTENT of teh adviser and the INTENT of the client. The REASON WHY any action has been taken (Or NOT) is then clearly demonstrated on the sound recordings of the discussion with the client and it also demonstrates, that with the time contraints often imposed by a client, decisions have to be made and action taken, perhaps without every I being dotted and t crossed. If a client then wants to complain, then at least we will be able to demonstarte clear intent. We need this industry to get back to some kind of sanity and to be treated just as any other provider of services would be i.e. have the protection of the law. If every other profssional has access to the 15 year long stop defence and we are denied it, then we are outlaws. Laws are there for our protection and if we are given the defence of Law, then we should work within them. If we are denied them when we call upon the law for defence, then we ARE OUTLAWS and have no moral responsibility to remain within them and the F-pack need to think VERY carefully on this.

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