The FSA says small adviser firms fall “well short” of meeting treating customers fairly requirements compared with bigger firms and it intends to assess every small firm on TCF through visits and phone interviews.
Head of investments, small firms division Jonathan Fischel says the FSA is introducing a programme of measures to increase its contact with small firms to encourage them to make faster progress on TCF.
Fischel says bigger firms are well ahead of smaller firms in embedding TCF principles and these measures have been aimed at small firms to identify those most in need of attention. Initial assessments will be followed with visits to about a quarter of all small firms.
The FSA says there are around 5,000 adviser firms, with 90 per cent classed as small firms with under £3m annual turnover and fewer than 20 registered individuals.
The deadline for all firms to demonstrate they are treating customers fairly is December 2008 but the FSA says its assessments will extend beyond this deadline.
Fischel says: “We are well short of where we are with the larger firms. This is about helping smaller firms and we think it is a proportionate risk-based approach. There is a small minority of firms out there who do not want to engage with us and we want them to be clear that we will be assessing them and visiting them sooner or later.”