A "lack of clarity" from the regulator is causing adviser firms to question whether their in-house implementation of treating customers fairly (TCF) will be in line with FSA expectations, research suggests.
The Financial Services Discussion Club (FSDC) member survey 2008 found firms are finding it difficult to turn principles into internal rules and to ensure “a consistent approach across the business”.
The study follows a warning from the Association of IFAs (AIFA) this week, which called on the FSA to provide clarity to intermediary firms on the greater use of guidance in place of rules-based regulation.
The FSDC study, conducted before the expiry of the March TCF deadline, also found nearly 10% of firms did not expect to be ready in time, while some firms confidently predicted they were ahead of schedule.
Ian Gorham, partner at Grant Thornton, which sponsored the survey, says: “There is some valid concern about whether the FSA and firms will have common expectations around TCF.
“This remains a key area of risk, and firms need to be doubly sure they have properly assessed and recorded their progress, successes and soundness of controls.”
The study quoted one of its anonymous members, which include senior managers from asset management and life and pensions companies, as saying: “A lack of clarity from the FSA has made the implementation of principles-based regulation difficult.”
The study also suggests TCF will dominate the regulatory agenda of most firms in the coming year, but financial crime and data security are also high on firms’ worry lists.
Gorham adds: “We are not surprised at the results, and that issues such as TCF and data security dominate the agenda.”
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