Treating Customers Fairly is a motherhood and apple pie concept which would seem to be common sense and has been around as accepted good business practice for decade upon decade. So what is new? Well, what is new is that TCF has become a regulatory principle which will underpin the financial services industry in the UK for many decades to come. It is no longer an abstract concept, it is going to become part of the fabric of our industry. One of the core objectives set out by the FSA in its rec-ently published 2005/06 business plan clearly articulates the objective of “helping retail customers achieve a fair deal”. This is one of the FSA’s three stated priority objectives for 2005/2006. The other two are promoting efficient, orderly and fair markets and improving our business capability and effectiveness. Reading the business plan is instructive. There is no doubt that achieving all three goals is believed to be an outcome from a wide range of actions and deliverables from all inv-olved – manufacturers, distributors and advisers. The consistent thread throughout the 59 pages is clear – treating customers fairly will be a key force for delivery of all these objectives. Any adviser, product provider or distributor who plans to be an effective player in our industry should therefore take heed and start to act positively and proactively. This article cannot deal with the many issues arising from this TCF approach. However, three things have struck me in reading the documentation on TCF. Firms (advisers, prov-iders and distributors) are going to have to show they monitor and respond to risks facing the consumer, that TCF must be seen to be embedded in their culture and corporate strategy and that product design and governance demonstrates awareness and understanding of TCF. These issues are clearly open to a degree of interpretation but the more we examine them, the more far reaching they seem to be. If our industry’s past behaviour is anything to go by, many will deny the need for radical action for some time. I would caution against this approach and encourage a proactive response where one can reasonably be found. The good news is I do think help is at hand. One of the recent developments which has gained momentum in our industry is the trend towards multi-manager offerings. It seems to me that an effective multi-manager service can intrinsically help address all three of the requirements set out in the FSA’s business plan. A well resourced multi-manager offering should be des-igned to monitor the investment risks (economies, markets, sectors, fund managers and performance) that consumers face, then respond to these developments through quality client communications, changes to the underlying managers, mandate amendments and sensible performance benchmarks. In addition, it should become a core part of any distributor’s and adviser’s product range. Finally, through the use of sophisticated risk management and portfolio construction tools (whether proprietary or bought off the shelf), products will be designed and built to include a range of best of breed managers. They should also have a transparent and documented audit trail of investment decision making, tracking errors, levels of volatility and produce a correlated performance. Is this asking too much from a multi-manager service? It could be if a multi-manager service is built on a shoestring. A properly constituted service which can go some way to meeting the requirements of the TCF regime must have a credible research service with both quantitative and qualitative tools, a robust portfolio construction process to allow risks to be managed and portfolios to be deconstructed to the level of underlying holdings and a monitoring and risk management process to follow performance, tracking error, volatility and style bias. There also needs to be a quality team to run the service and scale of funds under management. The recent proliferation of multi-manager offerings and providers does not allow for the economies of scale and the depth of service to be developed by all. It is inevitable that these requirements will lead to a process of multi-manager consolidation. With TCF upon us, the choice between a credible and long-lasting multi-manager service is a fundamental challenge facing distributors and advisers.