View more on these topics

PFS’s view

Three words seem to be on everyone’s lips in recent weeks – treating customers fairly. Unfortun- ately, quite often, this issue is seen to be mainly about compliance. Many people say they need to have much more guidance or even det-ailed rules before they can implement a package of measures.

Although there are compliance procedures to be developed in any business if it wants to give effect to a particular approach, that is not the main issue. Like ethics and taking active steps to improve the population’s financial capability, treating customers fairly is essentially a values-driven policy. I have sat in on many meetings within the industry where unexamined assumptions were routinely paraded, often based on the emotional leads of the participants. For example, it seems to be assumed in some circles that it is all right just to make a sale with scant reference to customer need except in very general terms.

The approach which the FSA has adopted on treating customers fairly is, as I have said, essentially values based. Just look at the relevant FSA principles:

l A firm must conduct its business with integrity.

l A firm must pay due regard to the information needs of clients and communicate in a way that is clear, fair and not misleading.

l A firm must manage conflicts of interest fairly.

l A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions.

Could anyone publicly disagree with this?

But if individuals allow to go unchallenged assumptions in internal discussions or plans which are damaging or disrespectful to the customer, then they are accountable on a number of levels. At the very least, they are helping to perpetuate the reputational issue which the sector suffers from. This works just the same way as other values-based issues such as racism, sexism and ageism. How many times do we come away from a bit of office gossip or an internal meeting with a feeling that somehow we have let ourselves down? In other words, the key to change first lies with the individual and the procedures should be built up from there.

Would Money Marketing readers like to send me or MM some stories of successes in treating customers fairly or ethical issues or some examples of failures, with a suggestion of remedial action? I look forward to your views.

John Ellis is public affairs director at the Personal Finance Society

Recommended

Matrix tops up ascension

Matrix Money Management is offering a top-up issue for the Matrix ascension plan, a capital-protected hedge fund,

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com