April 2014 marked one year since the UK's Financial Conduct Authority (FCA) took over from the country's previous regulator - the Financial Services Authority - with a tough new remit to discourage any financial misconduct before it happens. As a result, both regulators and financial services firms have taken time to reassess the values of this sector and to consider how they relate to the service being provided to customers. This renewed focus on consumer protection has not been limited to one specific country, but rather has had an impact on regulation across the globe.
One of the more immediate impacts from the introduction of the FCA is that there is now an onus on UK financial services firms to prove they have incorporated the regulator's Treating Customer Fairly (TCF) principles into their business model, and can prove that these guidelines are being followed at every level.
In many ways, TCF has become ingrained in Britain's financial services psyche over the past year, yet while most firms are adhering to the rules, they may not be effectively demonstrating the process and therefore could still fall foul of a more proactive regulator. Most firms, if asked, would confirm they are treating their customers fairly, yet many would find this difficult to prove to the regulator due to a lack of detail about client conversations, a failure to prove that key messages have been relayed, and an inability to show that a client has understood and agreed to the products, services or advice they have signed up to.
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