The Treasury select committee will grill the FSA on banking reforms this week and TCF will be on the agenda.
Aifa director general Chris Cummings says: “The FSA is in for a difficult six months to prove that TCF has cost benefits. The industry now has the opportunity to prove to the FSA that it can ease off on its TCF requirements.”
Earlier this month, incoming FSA chairman Lord Adair Turner pledged to scrutinise TCF. At a Treasury select committee session, he said: “I think there are debates in the retail industry about how effective the treating customers fairly initiative has been. I want to look at in detail to try to make sure I am happy with the approach we are using for that sector.”
Bloomsbury Financial Planning partner Jason Butler considers the FSA will struggle to justify the costs spent on TCF, especially for smaller, service-oriented companies.
He says: “There is a distinction between big institutions and service-based firms. The big companies focus on selling products, not providing good service, but we are all being made to jump though the same hoop.”