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This article explores the implications of the Retail Distribution Review (RDR) and its impact on meeting Continuing Professional Development (CPD) requirements. It also discusses the regulatory reporting requirements, T&C route to Level 6, mystery shopping implications, and themed visits. Additionally, it examines the FCA Risk Outlook 2013 and the importance of putting customers at the center of business. The article concludes with a discussion on the value that advisers bring to the table in wealth management.
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T&C CPD Networker London 13 June 2013
RDR +164 The dust beginning to settle?
Topics examined last time • RDR +71 • Meeting CPD requirements • SPS Renewals • T&C Regulatory Reporting requirements • Route to Level 6 • Mystery shopping implications • Themed Visits
Since we last met • New regulator in place • “FCA will continue to focus on how firms are managed and structured to ensure consumers are at the centre of their business” FCA Risk Outlook 2013
What has gone wrong? • Firms have designed, manufactured and sold products not always with the needs and interests of their customers in mind but instead, seeing the customer to maximise profit from. This has been accentuated by a view, and it has to be said encouraged by the FSA, that disclosure at the point of sale absolves the seller from a real responsibility of ensuring the product or service represents a good outcome for the customer. This, in turn, has led in many cases to a tick-box and overly legalistic compliance culture within firms, encouraged by what has been seen as a tick-box regulatory approach • Clive Adamson, Director of Supervision at the CFA Society -19 April 2013
What about our firm? • New business? • Business split? • Customer reaction to adviser charging? • Identifying the strugglers
TCF outcomes • Outcome 1 - Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture • Outcome 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 • Outcome 3 - Consumers are provided with clear information and kept appropriately informed before, during and after the point of sale • Outcome 4 - Where consumers receive advice, the advice is suitable and takes account of their circumstances • Outcome 5 - Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect • Outcome 6 - Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint
TCF outcomes • Outcome 1 - Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture • Outcome 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 • Outcome 3 - Consumers are provided with clear information and kept appropriately informed before, during and after the point of sale • Outcome 4 - Where consumers receive advice, the advice is suitable and takes account of their circumstances • Outcome 5 - Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect • Outcome 6 - Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint
TCF outcomes • Outcome 1 - Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture • Outcome 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 • Outcome 3 - Consumers are provided with clear information and kept appropriately informed before, during and after the point of sale • Outcome 4 - Where consumers receive advice, the advice is suitable and takes account of their circumstances • Outcome 5 - Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect • Outcome 6 - Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint
Examine Opinium Report • Discuss in your groups and identify the actions you/your firm might take to ensure that you are seen to put the customer where the FCA expect. • List your actions under TCF outcome • Identify specific actions that T&C can/should be involved in
The value advisers bring to the table • It feels almost patronising to list the ways a good adviser will add value but I think in view of your post it needs restating. The world has moved on and so has wealth management. Financial planning is ultimately about intertemporal budget smoothing and starts by challenging the heuristics that mean we tend to apply hyperbolic discounting to our intertermporal decisions – giving too much weight to near-term spending decisions. A good planner will be able to help their client establish an appropriate balance between expenditure today and tomorrow.
Adviser Charging • What’s fairest to all customers and how do you justify your stance?
Your proposition • Which type of customers are you targeting • Which groups have you excluded • Justify your exclusions • Why should people not use Online advice providers, direct providers, price comparison sites and advice from trade press?
Your culture, values and ethical behaviour • Define your culture • Describe your corporate values • Explain ethical behaviour • How do the above put the customer at the centre of your business? • How do your remuneration strategies support these
