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Notional trust

Do you put your clients at the heart of your business or does your organisation have other priorities? A simple question, and yet it lies at the heart of treating customers fairly.

Recent setbacks in world equity markets have created an understandable degree of uncertainty in terms of the likely short-term impact on investors’ portfolios.

The strength of the relationship between the adviser and the client, however, should remain unaffected.

Advisers I have spoken to recently tell me that such occasions are good tests of the quality of the client/adviser relationship. If you are due to see a client when markets have fallen and have no qualms about the visit, then yours is a sound relationship based on openness and trust.

Such as scenario is a far cry from the tales of unanswered telephones, unreturned messages and unopened letters lying in in-boxes that emerged after the ’87 crash, or more recently, following some of the revelations surrounding with-profits policies.

In fact, treating customers fairly is a continuation of what many advisers are already doing – and have been doing for many years. They have already acknowledged that fair treatment is an automatic and over-arching requirement for the success of their business. Their firms thrive on the long-term stability of their client base. Trust is endemic in these organisations, and their foundations are all the more solid for it.

These are not businesses that are so complacent that they are willing to risk seeing their customers come and go, taking with them stories of neglect or worse. As one adviser angrily explained to me, “I wish some of my industry colleagues would stop whingeing about TCF. How dare they sell their clients the prospect of a long-term relationship and then not treat them fairly?”

For good advisers, treating customers fairly does not represent a sea change, it is merely a requirement to encapsulate more formally procedures already in place.

Senior managers in such organisations have long recognised that virtually all aspects of their businesses have some interface with the client, so they have made sure that there is a comprehensive understanding of treating customers fairly at every level, no matter how junior or how new to the firm.

If the client has a query, it is often the back office that is the first port of call to handle it and some of the paraplanners and administrators at work today will be the financial advisers of tomorrow.

The FSA has been in contact with us about which treating customers fairly codes and guidance the Personal Finance Society will deliver. This is not to suggest that the PFS wishes to become a second-tier regulator; this does reflect, however, our fervent wish to see treating customers fairly become an inherent part of all firms’ business culture. Indeed, in the latest edition of our magazine, Financial Solutions, to be published in April, we specifically focus on how more junior staff can hone their skills in dealing with clients.

From their first point of contact, clients need to be able to expect that the advice they receive is underwritten with integrity and professionalism.

This needs to become a given. Only experience will permit them truly to believe it though. Trust has to be earned.

Tim Eadon is chief executive of the Personal Finance Society.


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