Treating Customers Fairly - Insurance Times

We are all governed and must abide by the High-Level Standards set out as Commandments by the FCA. In those 6 High Level Standards, the first one is Principles. Principles is then sub-divided in to 11 sub-sets. I’d like to discuss the 2 Principles, which in my mind stand out as the acid test of the Culture of a business organisation in the 21^st century of financial services.

The 2 Principles are Integrity and putting Customer Interests first – i.e. Treating Customers Fairly.

The global financial crisis highlighted the need for a firms Culture to be putting the Customer firmly at the centre of its business. A sound business culture will ensure that everything a firm does is for the benefit of its Customer and there is no conflict between a firm’s business practices and the best interests of the Customer.

If the firm’s Culture is to put the Customer firmly at the centre of its business, as all firm’s are now hopefully keen to ensure are there any aspects of the business which do not align with this Culture.

Historically where firms have failed to put the Customer first the FCA has stepped in. Whether this is selling of payment protection policies, or the charging of disgustingly high interest rates, the FCA has firmly put a stop to unfair practices. In each case the financial services firms promoting such products tried to justify them on commercial grounds. There is no art to this however. It’s simple, what is unfair is quite simply unfair.

In my view many but not all insurance brokers are putting profit first and not the Customer in their sale of premium finance to the Customer. Like all such historic unfair practices the FCA will soon stop this with clarification of existing rules and if necessary fines.