What is Treating Customers Fairly (TCF)?

TCF is a regulatory framework set by the Financial Sector Conduct Authority (FSCA). This framework governs the way an FSP business conducts daily dealings with its clients ensuring that all clients are treated fairly, during all stages of the product life cycle and advice process. Fair treatment of customers underpins the General Code of Conduct for financial services providers (FSPs) and Representatives. The treating customer fairly principle aims to raise standards in the way firms carry on their business by introducing changes that will benefit consumers and increase their confidence in the financial services industry.

TFC aims to:

  1. Help customers fully understand the features, benefits, risks and costs of the financial products they buy.
  2. Minimise the sale of unsuitable products by encouraging best practice before, during and after a sale.

What TCF isn’t:

TCF doesn’t mean:

  1. Creating satisfied customers; a satisfied customer could still be treated unfairly and not know it.
  2. That every firm must offer an identical level of service – the FCA recognises that businesses have different resources and ways of doing things.
  3. That the FCA has the final say on which products consumers should want or be sold.
  4. That customers are no longer expected to make decisions or take responsibility for them

TCF is about a culture – doing business in a way that will help ensure customers get fair treatment.

The six outcomes of treating customer fairly:

Outcome 1: Customers are confident that they are dealing with providers where the fair treatment of customers is central to the FSP’s culture;

Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of the identified customer groups and are targeted accordingly;

Outcome 3: Customers are given clear information and are kept appropriately informed before, during and after the time of contracting.

Outcome 4: Where customers receive advice, the advice is suitable and takes account of their circumstances.

Outcome 5: Customers are provided with products that perform as providers have led them to expect, and the associated service is both of an acceptable standard and what they have been led to expect.

Outcome 6: Customers do not face unreasonable post-sale barriers to change product, switch provider, submit a claim or make a complaint.

An FSP needs to move towards a place where their business practices achieve these outcomes and eventually become an inherent part of all areas within the business.

TCF Principles:

  • TCF Outcome 1 – Principle of Culture & Governance
  • TCF Outcome 2 – Principle of Product Suitability
  • TCF Outcome 3 – Principle of Disclosure
  • TCF Outcome 4 – Principle of Suitable Advice
  • TCF Outcome 5 – Principle of Performance and Service in line with expectations
  • TCF Outcome 6 – Principle of Claims, Complaints & Changes

Theses principals can be integrated in all areas of the business to ensure that the desired outcomes are achieved.

Incorporating TCF in your business ensures that you comply with regulation and in turn results in fewer complaints from clients. Clients who are treated fairly are more likely to remain loyal clients and in turn reward your business.