TCF & RDR programme building and GAP report assessments
All our clients have now been assessed by the FCA and we are happy to note that everone got good feedback reports.
Treating Customers Fairly (TCF) is now part of the culture within our client firms. However, we are not complacent regarding the matter and conduct annual GAP reports and ongoing checks and staff training.
The Retail Distribution Review was implemented on 1st January 2013. Although we have a year to complete the reference transition all our clients have now FCA compliant documentation. We have put in place sales friendly documentation overcoming any client reluctance to engage with Relevant Market Definition, Service Options, Fee Payments and VAT issues.
If your feedback from the recent FCA risk survey was not favourable or you have concerns about your firms progress now is a good time to contact us. Following an assessment of where your firm is currently positioned in the process we will be able to suggest what steps need to be taken to bring you up-to-speed.
Management Mentoring & staff coaching
Members of your management team not only hold the key to your day-to-day business success but are also charged with the responsibility of providing evidence to the regulator that your firm's implementation of the SYSC rules and monitoring of systems are compliant. Our clients have often found it beneficial and comforting to have someone helpfully looking over the shoulder of managers and providing them with competent friendly guidance in how best to accomplish the task.
We will train and ongoingly support your advisors and back office staff on how to be and stay compliant during the sales process, during the documentary completion of a sale and the post sale care. We will guide your staff on issues of general client servicing and the required culture change needed to meet principle based regulation. We will train and assess your unit managers in the compliant method of file audits.
Management training to meet SYSC obligations
The plethora of new documentation and changing rules emerging from the regulator's printing presses often leave competent business managers at a loss as how to interpret and implement compliant systems. We provide regular presentations and summaries of what the current expectations are, as well as ongoing ad-hoc injection of what to look out for. We will suggest and explain required system changes so that you can demonstrate to the regulator your compliant control over the business.
Ideally the regulator would like one Senior Manager to devote all his time and effort to compliance matters. This is not always possible as it is time consuming and costly and other business producers would have to meet that individual's normal sales volume. Having the Compliance Oversight Officer and other senior managers supported by competent outside sources alleviates the problem. The constant monitoring af mandatory documentation is a full time job and is an addition to simply running a business effectively.
In many instances senior managers find that because "it is cold and lonely at the top" useful relevant and timely discussions often encompass many other subject matters.
Firm Risk Assessment & Disaster Plan formulation
We will provide you with relevant templates and discuss elements with you allowing you to complete these mandatory documents. If you prefer, we can, following a discussion, write the initial draft documentation for your consideration and alteration.
Compliance, Money Laundering, Data Protection, Bribery and Corruption, Fit & Proper, Training and Competence and Board reports formulation
We can either proof read your draft reports and make suggestions or alternatively we can formulate your draft reports for you. Normally we would have discussions with you and your senior staff to explain "why items appear in the reports" and "what to think about for the future".
Training & Competence assessment programme
Annual competence assessment is now part of the fabric of the industry. Having a written agreed training and assessment strategy which works for both the individual and the regulated firm is of paramount importance when considering the suggestions made in the Retail Distribution Review.
Supervisors and coaches need to be qualified and have understanding of their roles and the expectations put upon them not only by the firm but also the regulator. We undertake the relevant training before conducting the final testing which is required.
Recruitment issues and Employment relationships
There are three separate elements to consider when one is engaging with potential new members of staff. There is the commercial element, the legal element and the regulatory element. We have the skills and documentation which can guide you through the maze.
Equally important are the same elements when ongoingly dealing with current members of staff or when the relationship is not working out.
Financial Promotions strategies
Having an idea for bringing in new business or to create name awareness is one thing. Ensuring that it is compliant and does not make promises you cannot keep is quite another. We can assist you with compliant formulation of ideas or proof read the material you have already created including your standard documentation and your website.
'Engaging with clients' documentation
We have over a number of years developed compliant documentation which allows sales staff to accomplish competent and compliant sales as "painting by the numbers" without encroaching on the flair and freedom which makes an individual sales person successful and unique. As the documentation has been developed by sales people for sales people, few advisors find any difficulties in adopting and using the documentation.
Good, relevant and understandable documentation fosters confidence both in the adviser and the retail client and often leads to more and larger volume sales. Consistent and repetitive uniformed use by all staff provides the regulator with confidence in your abilities to treat customers fairly and your management of system controls.
Our templated layout for a compliant suitability letter will prevent future complaints and meet all the requirements required in a later file audit as well as scrutiny by the regulator.
File audits & due diligence
We have developed extensive file audit documentation which allows us to test that the bench mark set by our point of sale documentation and general file completion documentation style and training is being achieved. The file audit has built in qualities which will spot deficiencies in other areas such as adviser ability (training issue), quality of research, Risk Assessment and Client Agreement and general customer care. Our file audit also tests for Data Protection and Money Laundering issues.
Our due diligence testing will examine all aspect of your business.
Client servicing strategy
Good relation with clients is a commercial necessity for survival. Most, if not all, advisers are excellent in the area of face-to-face contact. However, it is often the out of sight effort which determines if a relationship is being enhanced or gradually begins to fade.
Conscious consideration must be given by all members of staff to all aspects of the relationship in order to ensure that there is no downside for the client. It is by providing the unexpected service that clients notice and appreciate your true value to them.
It is for management to ensure that awareness and systems support the effort.
Client & Product Risk Assessment
Client risk assessment and agreement is not a new topic. The various regulators have, over the years, referred to this and the FOS in investigating complaints has made the subject the cornerstone of assessment. Historically advisers have told clients what risk profile they had and unless the client objected to the assessment this was taken as being fact. The ombudsman and others have regularly rejected risk assessment as they did not match other verifiable information from the time of sale.
Some 12 years ago we adopted a different approach which involves giving the client a tool to assess his own risk profile and have this explained to him before confirming his understanding and acceptance in writing.
Using this correct risk profile it is simpler to match this to products with an industry or regulator risk acceptance or a product provider assessment. We can guide you in assessing and purchasing bespoke research packages.
Complaints Procedures and complaints handling
Complaints cost money - it does not matter if you have no case to answer - time and effort and financial cost of a case proceeding to the FOS will cost you a minimum of £1,000. If you lose the case, the total cost could initially be up to the excess on your PI insurance per complaint..
You must have a compliant complaints procedure and be able to demonstrate how you adhere to this. More important is that you can reach a positive conclusion quickly so that it does not take over your working life. We have successfully handled more that 600 endowment complaint cases and about 400 other cases over the last few years and are competent in dealing with complainant, complaint handling firms and the FOS. The mentioned cases originated from sales where our documentation system was not used. We can demonstrate to the FCA that complaining clients are being treated fairly.
Just as important our sales documentation and audit system assist in preventing future complaints.
Anti-Money Laundering matters
In the UK, there has been a long-standing obligation to have effective procedures in place to detect and prevent money laundering. The offence of money laundering was contained in various acts of Parliament (such as the Criminal Justice Act 1988 and the Drug Trafficking Offences Act 1986). The Proceeds of Crime Act 2002 (POCA) consolidated, updated and reformed the law relating to money laundering to include any dealing in criminal property. Specific obligations to combat terrorist financing were set out in the Terrorism Act 2000.
The latest guidance on Money Laundering was contained in the Money Laundering Regulation 2007 (last update April 2012) which achieved Treasury approval on 15 December 2007.
Many of the procedures which will be appropriate to address the above obligations are similar, and firms can often employ the same systems and controls to meet them.
It is important that a firm has up-to-date risk based procedures in place and that all staff understand their obligations and the penalties befalling the individual if the rules are breeched.
We can implement the procedures, train your staff and test for understanding. On an ongoing basis we will keep you informed of changes to legislation, updates to the Treasury Sanction List, and our file audit will test and verify if the system is being applied in practice within your firm. We are available with guidance at any time if an uncertainty arises.
We can assist you with the creation of your Money Laundering Reporting Officer's annual reports.
Data Protection and Bribery & Corruption matters
Firms cannot operate without collecting and using certain types of information about people and businesses with whom they deal. This personal information must be dealt with properly however it is collected, recorded, used or stored - whether on paper, electronically, or other means. Care should be taken regarding disclosure of personal information to third party.
Following the directive in the Data Protection Act 1998 firms must have a Data Protection policy in place which is understood and implemented by all staff and occasional contractors working at the firm's premises. Management must evidence control over the system in place.
In the Act there are eight Principles which require that personal information:
- shall be processed fairly and lawfully and, in particular, shall not be processed unless specific conditions are met;
- shall be obtained only for one or more specified and lawful purposes, and shall not be further processed in any manner incompatible with that purpose or those purposes;
- shall be adequate, relevant and not excessive in relation to the purpose or purposes for which they are processed;
- shall be accurate and, where necessary, kept up to date;
- shall not be kept for longer than is necessary for the specified purpose(s);
- shall be processed in accordance with the rights of data subjects under the Act;
- should be subject to appropriate technical and organisational measures to prevent the unauthorised or unlawful processing of personal data, or the accidental loss, destruction, or damage to personal data;
- shall not be transferred without a client's permission to a country or territory outside the European Economic Area unless that country or territory ensures an adequate level of protection for the rights and freedoms of data subjects in relation to the processing of personal data.
Caledonia Consultancy can implement a compliant system for you and guide you and your staff to a better understanding of your obligations.
All firms must now have a policy for dealing with Bribery and Corruption. Again we can help with compliant documentation.
Over the years the various regulators have insisted on specific styled documentation and monitoring records. Some of these documents and records have become obsolete and others have taken their place. Some have mandatory wordings and others provide you with the freedom of creating a documentation style more suited to your specific business.
We can supply you with all the documentation needed and we monitor when changes need to happen. We have also over the last 10 years taken advantage of the changing legislation and created client specific documentation which gives your firm an edge over your competitors.
We can write specific procedures or documentation relevant to your operational needs.
Example contracts undertaken
Our main stream business are regular agreed visits where we perform or check the mandatory compliance function. We assist your various senior managers fulfilling their mandatory functions. During visits we are naturally always available for face-to-face meetings with all your staff either in groups or as one-to-one. We can plan and execute specific training sessions by agreement as your business dictates a need.
Simulated FCA compliance audits lasting 1 to 2 days where Caledonia Consultancy will conduct a thorough review of your current compliance arrangements to identify any areas of weakness. In true FCA fashion we will give you feedback on the day and compile a comprehensive report on our findings. Unlike the FCA we will suggest workable remedies if any weaknesses are discovered.
We can provide separate audits into any of the above elements of compliance. A comprehensive report will be provided, allowing you to implement improvements or alterations.
Free standing Complaints handling and FOS negotiation can be undertaken.
Client specific reports or manuals can be developed in specifically selected subject areas.
If you are contemplating direct authorisation or setting up an appointed representative network Caledonia Consultancy can guide you through the application process and provide you with all the documentation required as well as assist you with the application.