Preparing for an FSA assessment

Over the years the vast majority of our customers have received an FSA visit or assessment.

These assessments can take place in a number of different ways. For example, the FSA can visit firms at their premises, or an assessment can be completed over the telephone, or a firm might have to meet with the regulator at say a local football stadium or hotel for instance.

Whilst the thought of being subject to an FSA assessment is never very appealing I must stress that firms shouldn’t be worried by the thought of a review. I know it’s easy for me to say it but at the end of the day the regulator only wants to ensure that you are following their rules compliantly and that you can evidence that you are treating your customers fairly. 

I’ve worked in the specialist field of compliance for the last 12 years and personally I believe that the vast majority of firms do install a thorough compliance culture within their operations and are treating their customers fairly. However, the key area where firms usually fall short is based around evidencing it all. Usually this is because firms become too busy to document and record information which of course is a necessity for FSA compliance, i.e. how can you prove you have done something if there is no record on file?

A very common and trendy element of FSA regulation is based on Treating Customers Fairly aka TCF. Therefore if you are preparing for a forthcoming visit from the regulator, be sure to have fully up to date evidence of TCF which can be easily presented to them.

It’s worth reminding firms that in order to comply with the TCF requirements firms should be (as a minimum):

• Regularly reviewing their Management Information (MI) and acting upon any issues that may arise;

• Completing an annual GAP Analysis (which highlights any potential weaknesses and how these will be rectified);

• Testing advisers competency on a regular basis and ensuring that full CPD training records are being maintained;

• Engaging a third party compliance specialist to complete an audit on the firm and reacting to any issues that have been identified;

• Sending customer satisfaction questionnaires so that the firm can establish if they are treating their customers fairly and allowing the customer to voice any concerns that they may have;

• Reviewing any Financial Promotions campaigns (Marketing) to ensure all the content is ‘clear, fair and not misleading’;

• Analysing any complaints received to ensure that the same issues don’t crop up again and again.

The above are just brief examples of what a firm could be doing to go towards satisfying and evidencing that they are abiding with the TCF rules. The above areas will almost certainly be assessed by the FSA if you ever do receive a visit from them so my advice is to ensure that you are familiar with all of the above examples.

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