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Sole advisers and TCF

As with all firms, if you’re a sole adviser you must be able to evidence to the FCA that you are implementing TCF. The fact that you don’t employ other staff doesn’t change anything - it just means you need to apply TCF practices in a way that is appropriate to the nature and size of your business.

This page – which should be read in addition to the other pages on the TCF Info website - provides some extra pointers for sole advisers in relation to TCF.

Understanding and communicating TCF

As a sole adviser you must make sure that fair treatment of customers is at the heart of your business. This means being able to demonstrate that you understand TCF (including the six consumer outcomes) and communicating it to your customers and anyone you work with, such as an administrator.

Useful links: What is TCF?  TCF principles checklist   TCF Customer Statement

Business decisions

As a sole adviser, always think about how any business decisions you may decide to make will affect the fair treatment of your customers. For example, if you’re introducing new products or branching into a new area, do you have the necessary understanding and/or resource to ensure that what you’re offering is suitable for your customers and that you can provide an acceptable quality of service?

Tip: consider joining a local networking group to help you benchmark yourself against your peers and get a fresh perspective on the way you work and the business decisions you make. This will offer the FCA evidence that you’re serious about thinking about how your business decsions might affect TCF.

Monitoring and control

As with all size of firm, you need to maintain management information and document what is going on in your business.Your new business register and all other information you collect during the course of your dealing with customers should form the basis of this. You’ll also need to regularly review and act on your MI.

Make sure you keep records that show:

  • the type and quantity of product you are selling
  • whether you are getting any complaints about a particular product
  • what action you took to put things right if you had a complaint
  • what products were discussed and how sales decisions were reached

Tip: consider having a confidentiality arrangement with a locum whereby you review each other’s files and/or complaints and give each other objective feedback.

Tip:When auditing files look at the quality and suitability of the advice/information given, not just whether the correct process has been followed.

Tip: if underaking your own file reviews/self audit, keep a record to demonstrate you are doing this. The TCF Info Self Audit Checklist will help you do this.

More useful links: TCF MI – getting started    Complaints and TCF

Training and competence

Make sure you keep up to date with your market and new products that become available.

If you’re moving into a new area of business, make sure you can show that you understand the risks involved and if necessary get some training.

Tip: keep a formal record of any training you undertake and of the ways you keep yourself up to date with the changing market.  See TCF Training for an example training log that can be adapted for a sole trader.

Reward

TCF will be compromised if you focus on volume of sales at the expense of quality of service or suitability of product. You must be able to demonstrate to the FCA that your approach to sales puts suitability and the customer’s interests first.

Tip: make a point of reviewing your sales practices and making changes where appropriate. Ideally keep a record of your review and what changes you made.

Good and poor TCF practice – more tips and examples

Follow the link below to find examples of good and poor TCF practice in small firms identified by the regulator in relation to the mortgage, financial services and insurance industries. Where relevant there are extra notes for sole traders.

FCA examples of good and poor practice in relation to TCF.


 


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