Transcript Document

September 2008
Provider – Distributor
Responsibilities
to TCF
• Background
• Guidelines for the sharing of Responsibilities between
Friends Provident and its Distribution Partners to ensure
the fair treatment of customers
• Friends Provident/Distributor TCF Responsibilities
• Responsibilities by Outcome
Guidelines for the sharing of
responsibilities between Friends
Background
•
Friends Provident is fully supportive of the FSA’s ‘Treating Customers Fairly’
initiative and strongly believe that our culture, values and business model are fully
aligned with the requirements of the regulator.
•
We have initiated a programme of projects across all areas of our business to ensure that
TCF principles are embedded into the culture of our organisation
•
A key consideration for the FSA is that there is clarity about the Responsibilities of product
Providers and Distributors and that this is understood by all parties
•
We have created this document with the intention of clearly defining these Responsibilities
within the umbrella of our corporate values and operating model.
•
This paper is structured around the FSA’s 6 Consumer Outcomes – describing for each
what we believe are the key Responsibilities for Friends Provident and for our Distribution
Partners
•
Our expectation is that by being specific about our interpretation of the FSA’s requirements
in respect of the split of Responsibilities, we will be removing doubt and adding much
needed clarity to the debate on these issues.
Guidelines for the sharing of
responsibilities between Friends
The Responsibilities of Providers and
Distributors in ensuring the fair
treatment of customers.
“
Providers and Distributors should consider the impact of their action (or inaction) on the
customer in various stages of the product life-cycle, or the various stages of provision of the
service
This will include addressing the fair treatment of customers at the following stages:
Design and Governance
Identifying target markets
Complaints handling
Sales and Advice processes
Marketing and Promotion
After-sales information and service
Guidelines for the sharing of
responsibilities between Friends
Friends Provident – Distributor
TCF Responsibilities
•
On the following pages we describe our view of the split of Responsibilities between
Friends Provident and our Distribution partners to support delivery the FSA’s 6 customer
outcomes
•
Each section aims to clearly distinguish between our Responsibilities and those we
expect our Distribution partners to undertake.
•
Further information can be obtained from your account manager
Guidelines for the sharing of
responsibilities between Friends
Outcome 1
Consumers can be confident that they are dealing with firms where
the fair treatment of customers is central to the corporate culture
Friends Provident Responsibilities
Distributor Responsibilities
• Ensuring that effective MI systems and monitoring are in place to
assess that customers are being treated fairly
• To drive the implementation & embedding of TCF from the top
down
• To adopt a performance management and remuneration strategy
which rewards positive TCF behaviours and takes meaningful
action where these are not demonstrated.
• Ensuring that effective MI systems and monitoring are in place to
assess that customers are being treated fairly
• To Regularly review consumer contracts to ensure terms are fair,
clear and not misleading.
• Ensuring the advice process and adviser & staff remuneration &
incentivisation are consistent with and encourage TCF behaviour
• To notify Friends Provident promptly of potential instances of unfair
customer treatment caused by a RI and to co-operate fully with us in
resolving the issue to ensure a satisfactory outcome for the
customer
Guidelines for the sharing of
responsibilities between Friends
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
Friends Provident Responsibilities
Distributor Responsibilities
relevant product; aiming to co-ordinate with any regular product
review cycles
• Ensure that all appropriate Friends Provident products are
assessed for approval on any Recommended Product List as part of
a regular Product Review Cycle
• To clearly identify the target market on product literature and to
ensure that all sales material and presentations to advisers explain
what the target market is
• To ensure that the approval process for products/Providers and
panel selection will make due consideration of the TCF
requirements
• To stress-test products to identify how they might perform in a
range of market environments and how the customer could be
affected (unless product has no potential variance in performance)
• To review the panel position of any product at, or prior to, launch
(or significant amendment) or in reaction to adverse news flow
• Provide Distributors with details of the intended market for each
• To have effective monitoring & MI in place to enable a review of
whether actual sales through Distributors reflect the target market
any product was designed for and to communicate any variance to
Distributors
• Using the information supplied by Friends Provident, to confirm the
intended target market for which products are suitable on all product
fact sheets/bulletins produced by the Distributor
• To supply accurate and timely management information in a
standard format and at an agreed frequency.
Guidelines for the sharing of
responsibilities between Friends
Outcome 3
Consumers are provided with clear information and are kept
appropriately informed before, during and after the point of sale
Friends Provident Responsibilities
• To take all reasonable steps to ensure that information contained on
illustration systems is accurate and to rectify errors promptly.
• To ensure that all literature/media – customer facing or otherwise – is
technically accurate, clear and not misleading
• To proactively communicate with customers in advance of options
becoming exercisable on their product or of changes to product terms and
conditions.
• To test product literature with customer groups for clarity and depth of
understanding. Check that information given to Distributors is sufficient to
enable them to understand the product/proposition enough to be able to
give suitable advice
• To ensure that all literature/media in relation to products is written with
the target market in mind and is understandable
• To keep current all literature/media available to customers/advisers and
to remove obsolete stock from circulation as soon as practicable.
Distributor Responsibilities
• To understand the products being made available by
Friends Provident and to ensure that advisers are trained
to accurately represent these products to customers.
• To be satisfied that Friends Provident has taken sufficient
care to ensure that customer facing literature is clear and
not misleading
• Not to use any customer facing material from Friends
Provident unless the Distributor is satisfied as to it’s
technical accuracy.
• To ensure that literature labelled “for adviser use only” is
not made available to customers.
• Where communication from Friends Provident to the
customer is via the Distributor, to promptly pass such
communication to the customer
• Make clear that information designed for Distributors should not be used
with customers
• Keep Distributors informed of changes to its funds or services
Guidelines for the sharing of
responsibilities between Friends
Outcome 4
Where consumers receive advice, the advice is suitable and
takes account of their circumstances
Friends Provident Responsibilities
Distributor Responsibilities
• To take all reasonable steps to ensure that information contained
• Ensure that advice given by advisers and products sold are suitable
for clients’ needs & risk appetite
on Provider or third-party quote systems is accurate and ensure
errors are corrected promptly
• Accurate and clear product information is provided to Distributors
and is kept up-to-date
• We will develop a standard report of MI that helps Distributors to
assess the quality of advice given and identify any problems, such
as persistency, cancellations, claims upheld rates, etc
• Ensure that an approved Training & Competence scheme regime is
in place for all advisers
• Ensure that advisers fully consider their clients needs and
circumstances when providing financial advice
• Ensure that advisers have access to appropriate product
information to enable them to properly advise their clients
• Provide high quality learning events to help advisers develop
relevant and topical knowledge and skills
• Carry out themed reviews to check the suitability of advice provided
by its advisers on ‘high risk’ products
Guidelines for the sharing of
responsibilities between Friends
Outcome 5
Consumers are provided with products that perform as firms have
led them to expect, and the associated service is both of an
acceptable standard and as they have been led to expect
Friends Provident Responsibilities
• To stress-test products during development and the subsequent
product lifecycle (where relevant)
Distributor Responsibilities
• To fairly and accurately represent our products and services to
customers and to not create any expectation which is not supported
by Friends Provident.
• To periodically monitor product performance where this may vary
materially during the product lifecycle to check whether it is
continuing to meet the needs of the target market it was designed
for and to take appropriate action to rectify any variance.
• To consider factors such as fund performance, claims triggers,
claims history, complaints information, product incentives when
assessing products for suitability.
• To monitor SLAs & other product performance benchmarks agreed
in the contract and to take action to correct any variance.
• To research Provider service levels as a core element of the
product selection process
• To request transaction based feedback from customers in relation
to the service that they have received from Friends Provident and
Distributors
• To monitor the delivery of ongoing client service/advice and to
take meaningful action where this falls short of an acceptable
standard
• To process post sale amendments or information requests
promptly and accurately
Guidelines for the sharing of
responsibilities between Friends
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
Friends Provident Responsibilities
• To provide a post-sale customer service, including handling
claims or maturity/surrender payments in accordance with the
product specification and consistent with any expectations created
in the customer's mind through the product information provided.
• To, fairly and promptly, investigate and respond to any customer
complaints regarding the products and services we provide.
• To pass all complaints regarding the advice/sales process of a
Distributor promptly to that Distributor.
• To monitor the root cause of customer complaints and to take
action to address recurring issues
Distributor Responsibilities
• To provide a post-sale customer service, including handling
claims or maturity/surrender payments in accordance with any
expectations created in the customer's mind through the
sales/advice process and consistent with the terms of business
provided.
• To, fairly and promptly, investigate and respond to any customer
complaints regarding services provided.
• To pass all complaints regarding Friends Provident products
and/or services promptly to Friends Provident
• To monitor the root cause of customer complaints and to take
action to address recurring issues
Guidelines for the sharing of
responsibilities between Friends