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Treating customesr fairly

Treating Customers Fairly Gap Analysis & Action Plan For REEVES INDEPENDENT For the period: 1/9/2008 to 30/8/209 (12 months) Prepared by: Nigel Reeves Job Title: Principal Preface As an initiative, FSA’s “Treating Customers Fairly” (TCF) is deigned to ensure the regulator meets its regulatory objectives under the Financial Services and Markets Act 2000 in restoring market confidence by ensuring consumers achieve a fair deal. It is certainly not a new concept and is a foundation of many FSA Principles and Rules, not least Principle 6 “A firm must pay due regard to the interests of their customers and treat them fairly”. Reeves Independent is aware that TCF applies to all authorized firms, regardless of their size or the type of activities it carries out. This will range from product providers to small advisory firms. Reeves Independent falls within the latter with our category status being a “Small Personal Investment Firm”. Our firm has always been aware of the need to ensure we treat our customers fairly due to its commercial implications, however, we appreciate the need to review our business practices to ensure that not only have we sound commercial values but that also we make certain the customer receives a fair deal. Nigel Reeves, as Proprietor will be responsible for identifying what this means for the business, how this will be implemented and monitored and then documented throughout this action plan. Defining fairness FSA have not defined fairness and it will be for our firm to apply this based on the circumstances of our business. FSA are not introducing new rules as TCF will become a principle based approach and to ensure firms are acting within the “spirit” of the existing rules. To assist our perception we considered some of the key findings following a commission researched by the FSA on the subject of fairness, which were as follows; Give the customer what they have paid for; Ensure that the product provided is the one which the customer applied for; ensure that the customer’s understanding of what they have purchased and the reality of the product they are being sold coincide. Do not take advantage of the customer; Avoiding ‘pushy’ sales tactics; not selling products which, through lack of understanding on the consumer’s part, are either not what they need or are in some way inappropriate to their needs or expectations; not allowing the priorities of the provider to unduly influence the sale of a product. Offer the customer the best product you can; This must be evidenced at the initial sale and during the ongoing customer relationship. Do your best to resolve mistakes as quickly as possible; Whether the mistake is the provider’s or the customer’s, every effort should be made to resolve it; greater willingness of the part of providers to acknowledge mistakes or errors and, where appropriate, to make recompense to the customer. Show flexibility, empathy and consideration in dealing with customers; Where customers have made ‘honest’ mistakes, a degree of discretion should be used and each situation judged separately; the provider should err on the side of generosity, giving the customer the benefit of the doubt. Exhibit clarity in all customer dealings; Terms and conditions should be as clear and easy to understand as possible; changes or new features should be spelt out and explained; messages should be consistent across all channels and language which could potentially mislead should be avoided Implementation of TCF Listed below are the areas we have considered when embedding the concept of TFC into our current practice; 1. Financial promotions 2. Advice and sales processes 3. Training 4. Information issued by product providers 5. Accurate and timely record keeping 6. Disputes and complaint handling 7. Information to customers 8. Remuneration 9. Management information Within each of the above sections we have identified the following; • The key areas and considerations within the business • Do existing practices comply with TCF “Gap Analysis” you should detail your firm’s practices after each of the posed questions. • Any gaps that require implementation Following a review of the business we will then draft an action plan to detail how we will monitor and deliver these changes. 1. Financial Promotions Reeves Independent currently promotes and markets its business through; • Client referrals • Servicing clients • Introductions from linked companies and through communications with their respective stakeholders and members. • We perform regular communication through telephone conversation, email communication and one to one contact. • Website. The site is for information only and no business can be transacted on-line. Gap Analysis Do we have suitable procedures for approving a promotion? Whilst procedures are available through our compliance advisers SimplyBiz, due to the above, these have not been implemented. We do not feel our communications are considered to be promotions. How do we ensure all communications are clear, fair and not-misleading and “balanced” in their content and presentation? N/A How do we ensure each promotion is directed at the appropriate target audience? N/A How do we assess the impact of the promotion? N/A Do we know what type of customer we want? Client referrals are accepted on the basis of a client’s potential needs. Areas of Action Required Due to the nature in which the firm promotes the business it is considered existing practices are adequate to satisfy customer fairness in the approach we carry out. We should be aware that any generic emails that are sent should be considered as promotions and may be prudent to go for simply biz system of checking. 2. Advice & Sales Process Reeves Independent is authorised for Investments, Insurances and Mortgages. It is noted however that we are piloting the sub contracting of mortgage broking to a number of select brokers. We offer advised sales to our customers for all product types. We offer independent advice for investments, mortgages and certain insurances contracts. We do not ordinarily advise on or arrange for healthcare, buildings and contents and ASU}. We hold no connections nor has the business received any capital funding from any insurance companies. We like to offer quality , caring Independent Advice which looks after the interests of our clients first and foremost. We believe in service and repeat business through referral streams. Gap Analysis Do we provide relevant and correct disclosure documentation? (On a recent review FSA found a considerable proportion of firms’ IDDs were incorrect) All disclosure documentation has been checked by the Compliance Officer and SimplyBiz and accurately reflects the scopes of services and basis of charges. How do we ensure advice is appropriate for the sale? Nigel Reeves is deemed competent in his role as the only adviser. Self assessment is carried out together with critically analysing own weakness areas. Reviews are carried out to ensure this competence is maintained. He is responsible for maintaining his own level of knowledge and awareness of new/revised products throughout the market place. We also employ the services of SimplyBiz to assist with this. For product recommendation we use The exchange, Simply Biz, Company BDMS, AND MORNING STAR. We strongly follow the market through internet and daily newspapers. For investment and protection business we also review the markets on a regular basis and receive independent and provider literature to support our recommendations. We are to start using aquos. Having just lost Tim We are to reestablish ourselves with the up to date research methods and tools. How do we ensure due consideration is given to the customers needs, knowledge and attitude to risk? A full and comprehensive fact find is completed for all clients regardless of the type of business written. Existing clientst have records updated. How do we ensure the customer understands the advice given and product(s) sold, to ensure this meets their expectations? I pride myself on plain language explanations to clients. This is critical to our business model. During the course of each client meeting all product features, risks and commitments are discussed with the customer, together with a detailed explanation why we have recommended the product and why we believe it suitable for that customers circumstances? How do we manage their post-sale expectations? During the course of client interviews and after the recommendations has been made, we discuss with each client his/her future expectations and levels of reviews required. This varies from client to client but for a formal review service to be undertaken the client must commit to a retainer agreement. Where clients decline this invitation each is made aware of the level of ongoing services they can expect to receive. Our IT systems can identify certain information at any given time and where on-mass reviews are required these clients can be identified. We hope to develop our systems over time to increase the level information that can be identified and obtained from it. I would like to see our system be overviewed since it has been unchanged for some time. Do we understand how to communicate with the customer? The vast majority of our customers are existing clients. Over time we have built sound relations and common but formal communication lines. Do we know what type of customer we want? Customers who will benefit from high quality local independent financial advice? Areas of Action Required Our systems are computerized and there is a need to stream line and fine tune our process. 3. Staff Training Reeves Independent currently employs; {1} Proprietor/Financial Advisers {1} Administrators To ensure each individual is competent in their role we maintain minimum standards for; Recruitment Training Key Performance Indicators Company Procedures Gap Analysis How do we ensure staff perform their roles appropriately? All staff are considered competent in their roles and are assessed on areas such as regular 1-1 meetings, file reviews and KPI reports. We also enlist the services of SimplyBiz. Does the adviser always understand the product they are recommending? Yes. As a team we regularly review the marketplace and discuss any changes and the introduction, withdrawal and modification of any products. We also received substantial provider training on existing and new product launches. Are staff understanding of the principles of TCF and how this impacts their role? We have carried out an exercise to review all areas of TCF with all staff involved and their individual impact and also that of the business practices. This was carried out with the assistance of our compliance advisers SimplyBiz. Do staff have the necessary soft skills? Nigel Reeves is experienced and has been working in the industry for sometime. Nick is a caliber graduate with high levels of intellect and personal skills.. How do we know if staff are delivering TCF? We hold regular group meetings to discuss all areas of the business which will identify any issues but we also produce sufficient MI to further identify any issues that may arise. Areas of Action Required: To ensure management info is produced and acted upon. Ensure that Nick gets a personal 1:1 DEVELOPMENT MEETING. not done past this 4. Information Issued by Product Providers Product providers are responsible for complying with the TCF requirements to ensure they provide clear and relevant information about their products, however, we understanding the importance of verifying this to ensure it is not only correct but appropriate for our customers {COMPANY NAME} will not attempt to verify any actuarial assumptions made by the providers. Gap Analysis How do we ensure the customers understand the providers’ literature? Each adviser provides a full and detailed explanation to the client during the presentation and in a manner which is consistent with the individual customer’s level of understanding to financial matters. How do we ensure advisers have a full understand the products they sell? We always review key feature documents before they are provided to the client but we also have regular provider presentations to the team. Gap Analysis From the above business review have any areas been identified where you are not currently meeting the customers expectations of treating them fairly. List any areas and consider how the firm can address these gaps to formulate its action plan. Areas of Action Required 5. Accurate and Timely Records {COMPANY NAME} is aware of the importance of maintaining full and complete records of its customers and has the ability to reproduce these at any given time on request by the client or associated third party. We are aware that customer requests and dealings must be managed and carried out within appropriate timescales to meet their expectations. {COMPANY NAME} retains this information on a paper based format. Gap Analysis Do records maintained show sufficient information to adequately evidence we know are customers? All client records contain full and detailed circumstances of each client’s history. This is further backed up with a database of client information on {Back office system}. How do we ensure client requests are actioned in a timely manner? We have ? administrators who carry out file audits to ensure all paperwork and information to third parties has been actioned. Any instances where matters have not been completed are referred immediately to the adviser and dealt with promptly. This provides a ‘four eye’ check on all business written. Gap Analysis From the above business review have any areas been identified where you are not currently meeting the customers expectations of treating them fairly. List any areas and consider how the firm can address these gaps to formulate its action plan. Areas of Action Required 6. Disputes and Complaint Handling {COMPANY NAME} understands the importance and the seriousness of any complaints received against the firm. For this reason and to ensure the customer receives a fair deal we always review a complaint impartially from any business interests. When reviewing and dealing with a complaint we will ensure, wherever possible, that the person carrying out the review is independent from the complaint. We will ensure the person reviewing is not incentivised for defending the complaint. It is imperative where redress is to be offered it is a fair amount and that should an ex-gratia payment be offered it should not be done so in lieu of admission of our liabilities or on the basis that the customer is dissuaded from obtaining correct levels of redress. Gap Analysis Do we have effective and efficient complaints procedures which are documented? The firm has a full and comprehensive complaints procedure in operation. Are all staff aware of their responsibilities under these procedures? All staff have a good understanding of the complaints procedures and all have signed declarations to evidence this. Matters such as these are re-iterated with all staff on an annual basis. How do we manage to avoid conflicts of interest? If there is ever a conflict of interest the other director will carry out an independent review of the complaint. Additionally, to ensure total impartiality, any complaints will also be referred to SimplyBiz. How do we learn from any complaints we receive? All complaints are fully recorded and discussed at management meeting and staff training sessions. Gap Analysis From the above business review have any areas been identified where you are not currently meeting the customers expectations of treating them fairly. List any areas and consider how the firm can address these gaps to formulate its action plan. Areas of Action Required 7. Flow of Information {COMPANY NAME} has in the region of xxx clients. Many of these clients have been developed from long established relationships with the firm and its advisers. The danger that we perceive is that communication with these clients can over time become less formal. We therefore need to ensure that the firm provides all its customers formal communication to ensure they are adequately informed at all times Gap Analysis How do we ensure each customer is aware of the service they are provided with? A full description of the services offered by the firm is documented in the Initial Disclosure Documentations, which is also discussed with the client. How do we keep our customers informed on an ongoing basis? Post sale needs are then discussed with a client and whilst most clients do not take up the offer of ongoing serving or reviews, they are fully aware of these implications so that their future expectations can be established. Wherever it is necessary we can identify clients that can be affected by various market implications and where we believe it necessary contact can be made to consider the way forward. As detailed under section 2 we will seek to improve this system to help identify information and circumstances of a client at any given time or when relevant to do so. Where it is important for products to be reviewed and possibly re-broked we will often instigate client contact i.e. Mortgages that no longer benefit from a fixed or discounted periods. Gap Analysis From the above business review have any areas been identified where you are not currently meeting the customers expectations of treating them fairly. List any areas and consider how the firm can address these gaps to formulate its action plan. Areas of Action Required 8. Remuneration {COMPANY NAME} recognises the importance of how remuneration schemes can promote a positive impact on TCF and at the same time maintain its own commercial stability and incentives staff. Focusing our remuneration policy on sales alone could have a negative effect on TCF. Remuneration solely in this manner could encourage the possibility of inappropriate sales and other poor levels of TCF. Gap Analysis Does our remuneration policy have a positive or negative effect on TCF? Each adviser is responsible for self funding his own regulatory costs and have no set minimum sales targets to achieve. Each adviser is responsible for his own level of remuneration and annual financial statements are completed to ensure no adviser is encouraged to miss-sell. Does our remuneration policy influence non-sales staff to ensure they are TCF? Each non-sales staff will not be influenced as they receive a pre-determined amount of salary. Gap Analysis From the above business review have any areas been identified where you are not currently meeting the customers expectations of treating them fairly. List any areas and consider how the firm can address these gaps to formulate its action plan. Areas of Action Required 9. Management Information As a small firm the senior managers of the business have regular interaction with its customers and in this way we will be able to monitor whether our TCF objectives are successfully being met. This will be coupled with appropriate MI to enable an analytical assessment to be made. Gap Analysis Do we compile sufficient MI to enable us to demonstrate we our meeting our TCF objectives? We review KPI’s on a {Period} basis, which enables us to identify any shortcomings in the standards of the firm. We also employ the services of SimplyBiz to provide us with assistance regarding MI. We then regularly discuss our business practices with them to help identify improvements to compliance and the principles of TCF. What are the successful measures of TCF within the firm? For us to ensure we maintain good client relations and that clients are satisfied with levels of service they receive. Gap Analysis From the above business review have any areas been identified where you are not currently meeting the customers expectations of treating them fairly. List any areas and consider how the firm can address these gaps to formulate its action plan. Areas of Action Required Action Plan Gap identified How changes are going to be implemented Monitoring of changes Owned by Target for completion This column should list any gaps as identified in the above sections This column should explain how practices within the firm will be amended to comply with TCF. This could include amending or stopping existing practices or implementing new initiatives *This column should detail how each of the changes will be tracked at an introductory level and then on an ongoing basis. Each action must be realistic and achievable in terms of it being manageable and having the resources needed. You need to think carefully how you will track any changes and measure success. This column should detail who has responsibility for implementation of the change. Each task should be allocated to a specific individual. This does not have to the person responsible for TCF in the firm, although that person will assume overall responsibility of its effectiveness. This column should confirm when the change should be implemented by. Not all changes can be addressed immediately. The important issue is to ensure you have identified each area of change and show when you expect this to be delivered. *To assist with satisfying the requirements to ensure gaps are identified, implemented and monitored you may wish for your compliance field manager to carry out an annual audit to evidence you comply with TCF or to ensure you know what expectations you must attain.

S Jones

"I have a lovely house with posh floors. It's kept clean by our resident landlord representative and the other lads have a close social relationship with Mr Reeves himself. This is more a family or commune than your average shared property..."

d curry

Budget no frills accommodation ideal! good social atmosphere with other'porofessional' travellers. would recommend to my firnds as a good budget base.

Iain Richardson

Good flexible approach from landlord re accommodation offered, tenancy lengths & ratesa, items included. To mutual satisfaction of both parties. Now offers a variety of accommodation to suit different bugets

Mr JH Ferry, Bedlington

''Thankyou for your help and support regarding our financial affairs, which has been much appreciated. Should our circumstances change, or if we feel we require further financial advice we will of course get in touch with you again. I would further add that we would be happy to recommend the services of Reeves Independent to anyone requiring financial advice''. Quote taken from an unsolicited letter written by happy retainer client.

Paul Jones

Very professional service

John Smith

An excellent service, very profesional and reliable.

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