Treating Customers Fairly

Fact sheet 7: Customer Service

The Financial Services Authority (FSA) have identified the importance of their principle that a firm must pay due regard to the interests of its customers and treat them fairly. This requirement has been underlined by reference to other FSA Principles, the FSA Business Plans, speeches and other output.

FSA Supervision is also focusing on Treating Customers Fairly (TCF) when examining the way in which firms conduct their business.

It is important to note that the FSA have made particular reference to the requirement that TCF applies throughout the whole of the product cycle, in other words TCF considerations do not only apply up to the point of sale, but also extend to the servicing of the product after the point of sale.

The level of customer service provided to a customer post-sale is not usually fully defined to customers although many firms will set out certain elements in their Terms of Business letters. Typically, however, customers will have an expectation of the standards of service that they might reasonably expect and will react if their experience is not to that standard. Practically, the only ways in which the obvious risks of this mis-match of expectations can be dealt with is either to set out pre-sale service standards covering all customer service processes, or alternatively to operate a policy which does everything to ensure that any reasonable customer expectations will be routinely exceeded. The chosen solution may be a combination of both of these approaches, in particular, as it is virtually impossible to identify pre-sale all of the factors that may arise through the life of the product.

The policy of the firm towards customer service should be clearly communicated to all staff to ensure that they understand the way in which the firm expects their clients to be dealt with. Service standards should be routinely monitored.

Customer retention can be a key driver of profitability, and high standards of customer service will encourage client loyalty and drive a greater propensity for additional product sales and client referrals.