Treating Customers Fairly
Fact sheet 6: Sales process
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.
The sales process followed by a firm not only has to meet the minimum standards set out in the Conduct of Business rules, but must also satisfy the more subjective requirements set out in the principles.
Previous examples of cases where a customer has been considered not to have received fair treatment, have frequently revolved around their treatment by the firm, or its agent at the point of sale.
As a first stage to ensuring the requirements are fully met, it is essential that a full review be carried out of the advised sales process to ensure that they know your customer requirements are properly covered, and the suitability for the product recommendation is ensured.
Having designed an appropriate sales process the firm must ensure that the sales force receive training so that they have a proper understanding of the process, and are able to deal with customers in the manner required by the firm. Meeting the correct standard will form a key element of the training and competency regime.
Similarly, to operate a sales process to the correct level will also require that the sellers have a full understanding of all of the features of the products within their range, and will be able to use this understanding to match the needs of clients to the most appropriate product.
All of these elements will need to be tested on a routine basis and adequate levels of monitoring undertaken to establish that the correct sales processes are being followed in a practical sense. Monitoring should not rely solely on checks on sale documentation but should also include accompanied sales meetings and random surveys of customers to check their experiences. As another check, firms should also monitor sales persistency records and complaint levels, in both cases by reference to both sellers and product types.
