Why you should treat customers fairly

By Ryan Smith on October 9, 2018

Financial advisers should put the customer at the heart of their business model.

The Financial Conduct Authority (FCA) has made it clear that all financial advisers and companies must be able to consistently show that fair treatment of customers is at the heart of their business model.

The FCA has published the following six goals, which all companies should strive to achieve:

  • Consumers should be confident that they are dealing with companies where fair treatment of clients is fundamental to the corporation’s culture
  • Services and products sold and marketed in the retail market should meet the needs of the identified consumer groups and be targeted accordingly
  • Consumers should receive clear information and kept properly informed before, during and after the initial point of sale
  • When consumers receive advice, it should be suitable and take account of their circumstances
  • Consumers should receive products that perform as companies have led them to believe, and the associated service should be of an acceptable standard and meet the expectations set out by the company
  • Consumers should not face unfair post-sale barriers leveraged by companies to change products, switch providers, submit a claim or make a complaint

It is essential for companies to show that they are acting in a trustworthy manner to meet the needs of their customers; otherwise, they face potential scrutiny on both an individual and a much wider level.

Alongside these outcomes, the FCA has also published its principles handbook, which offers guidance on fair treatment of customers. It mentions the obligation that “A firm must pay due regard to the interests of its customers and treat them fairly.”

Smaller companies and individual advisers are not exempt

Importantly, although exact expectations (such as the level of documentation) may be proportionate to the size of a company, the FCA goes on to state that sole advisers bear the same responsibility as larger companies when it comes to fair treatment. Those who do not have direct contact with customers must also be mindful, as they can be accountable for risk or poor conduct that breaches these principles.

Clearly, the FCA is taking the matter seriously and working hard to offer guidance for companies and set expectations of responsibility across the financial services industry. Surveys show worrying levels of trust among consumers for financial advisers, and the proportion of people accessing financial services remains considerably low.

Customer feedback is a key part of the process that companies should follow to ensure that they are meeting both the needs and expectations of their clients. While it may be obvious to seek feedback from disgruntled customers or those terminating their use of your services, even satisfied customers may not be receiving fair treatment.

By treating customers with consistent openness that always puts their needs at the forefront of every interaction, you can be part of regaining consumer confidence in the market. In uncertain times, the importance of sound financial advice only grows, but this guidance can only be of use when consumers are willing to access it and trust the good advice that they receive enough to follow it.

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