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TCF is turning its sights on smaller firms

The FSA has warned that its treating customers fairly initiative will target small firms and IFAs from next month.

The initiative has so far focused on bigger companies and product providers but the FSA issued a wake-up call to IFAs at last week’s Money Marketing Live event at Olympia in London, revealing that it would shortly switch its focus to small firms, working “sector by sector”.

Spokesman David Whitely said: “We are working tow- ards an approach for small firms. We will publish a paper next month which will herald the start of our work with small firms.”

FSA managing director (retail markets) Clive Briault said processes that IFAs need to address include staff inc- entives, the fairness of complaints’ handling and understanding of products.

But Association of Mortgage Intermediaries director Chris Cummings said the initiative is in danger of grow- ing out of proportion. He said: “This is becoming a multi-headed hydra. There are now more people in the FSA working on TCF than on mortgages and general insurance combined.

“My biggest worry is that this will be retrospective. This will kill the industry. The TCF bar will be raised constantly and the problem will come in five years when the FSA judges IFAs’ standards now on future standards.”

Aifa director of policy Fay Goddard says TCF may not change the way IFAs do business but she is concerned about the additional costs that advisers will incur in proving that they have complied with TCF principles.

She says: “The concept is fine but it could become too prescriptive. There is a risk that IFAs will follow the letter of the FSA rather than the sentiment.”

Halton Insurance Service director Mike Fry says: “There is a lack of awareness among IFAs that TCF is going to affect them. A lot of IFAs will feel that TCF is a threat. The costs are a problem but if you are doing your job right then you have nothing to fear.”


ABI working on anti-fraud network

The Association of British Insurers is developing a fraud detection system enabling insurers to access information on previous claims made under a particular name by linking up to other fraud detection networks. The ABI hopes to bring together in one place information held by a number of databases holding claims and fraud information. The new […]

Chilton on Mortgages

Topically, I should be reviewing the first six months of FSA regulation which passed over the bank holiday. Instead, I am going to focus on the cost impact of the Victorian approach that the majority of lenders are burdening the industry with, perhaps appropriate at a time when MG Rover collapses due to years of failing to move with the times.


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