September 9, 2008
Make it happen
Treating Customers FairlySteve Carruthers, RBS Intermediary Partners and Frank Eve, Frank Eve Consulting
The RBS Intermediary Roadshow
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Making a difference to your customer
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Welcome & session objectives
• What is TCF & its part in the mortgage sector?
• The lender view
• The intermediary view
• Help available
• Question & Answer / Discussion
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What is TCF?
Sarah Wilson, Director for Treating Customers Fairly, FSA:
“TCF is a principles based initiative which challenges firms operating in retail financial markets collectively to make a step change in their treatment of customers. We are asking firms to focus on outcomes rather than process and detailed rules, and have defined six consumer outcomes against which firms should measure progress.”
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The 6 TCF Consumer Outcomes
1. Consumers can be confident they are dealing with firms where the fair treatment of customers is central to the corporate culture
2. Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly
3. Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale
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The 6 TCF Consumer Outcomes…….(cont.)
4. Where consumers receive advice, the advice is suitable and takes account of their circumstances
5. Consumers are provided with products that perform as firms have led them to expect, and the associated service is both of an acceptable standard and as they have been led to expect
6. Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint
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How does TCF apply to mortgage sector firms?
Key areas for mortgages are:
• Product design
• Disclosure
• Remuneration strategy
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TCF – the lender view
• TCF is not new – evidencing existing practices
• Not about being ‘nice’ to or creating satisfied customers
• FSA will not arbitrate over what products consumers want or are sold
• Does not absolve consumers of responsibility
• Not about collecting large amounts of MI
• By 1st December 2008 we will demonstrate that:– TCF is being integrated into our business culture
– Appropriate MI and measures are in place to test whether we are treating customers fairly & delivering the 6 outcomes
– There are processes in place to monitor the MI to enable the right people to take action
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TCF – the lender view
• Lenders & distributors will not ‘police’ each other
• A partnership approach – share key data/MI
• Keep it simple – help each other to evidence
• An evolving & ongoing programme
• We do ‘walk the talk’ as a key priority
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TCF for the Intermediary
FRANK EVE
Chairman
TCF Lender Forum
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TCF for the Intermediary
• Specifically TCF aims to:
– help customers fully understand the features, benefits, risks and costs of the financial products they buy
– minimise the sale of unsuitable products by encouraging best practice before, during and after a sale
• The FSA ‘Conduct of Business Rules’ support TCF
• To satisfy FSA requirements extra steps required to show how you’re implementing TCF throughout your business.
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TCF for the Intermediary
• FSA doesn’t lay down any standard way in which TCF should be assessed and implemented, but highlights key areas within product life cycle where it’s a good idea to have extra checks in place. These include:
– product design
– financial promotion/marketing practices
– the sales process
– information and customer support after the point of sale
– complaint handling
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TCF for the Intermediary
• In practice this means identifying potential gaps (Gap Analysis) in TCF practice and developing procedures and checks to plug these in the following areas:
– Staff training/awareness of TCF
– Sales and marketing material
– Product understanding
– Advice and sales process
– Fact find and flow of information to the client (including after-sales)
– Complaint handling
– Remuneration/incentives
– Risk assessment of TCF non-compliance – Record keeping and Management Information
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TCF for the Intermediary
• www.tcfinfo.co.uk
– Free practical, user-friendly, online resource
– Plain English guides, tips and tools and checklists on all the areas previously outline
– You can download any of the material for own-branding and/or staff training – for free
– Funded by major mortgage lenders & supported by CML
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TCF for the Intermediary
• Example checklist can be used for Gap Analysis and auditing
• Will email attendees to offer free registration which entitles them to receive free e-newsletters and updates on relevant TCF matters
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Summary
Treating Customers FairlyLenders and Intermediaries
“A customer's experience should not be affected by whether a product or service is provided and distributed by a single institution or by two or more institutions.”
The information provided to brokers is sufficient, clear, and appropriate.
The channel selected is appropriate for the product and market
It is clear where information is for brokers only, and where it can be shared with customers
We monitor the results and act on concerns
Our brokers have the responsibility to:
Ensure they have sufficient information about our products and understand it, or ask for further information if they don’t.
Fully consider customer needs and circumstances
Ensure the post sales experience matches the expectation they give the customer
CUSTOMERS
TCF
LENDERS INTERMEDIARIES
Lenders and intermediaries are not expected to ‘police’ each other – the FSA will monitor both individually
Our primary responsibility is to ensure the customer has the information they require, and the product that best suits them.
There will be areas of overlap, however the onus is on us to determine how to ensure we provide information that is clear, sufficient, and appropriate for the channel.
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Question & Answer
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TCF in practice….
FAIR PLAY?
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Is this TCF?
• A customer goes into a branch of Acme Mortgages plc and applies for a mortgage but computer says NO!
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Is this TCF?
• Acme plc Mortgage Business has the highest level of arrangement fees in the industry
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Question & Answer