NEW RELEASE: Client Money and Assets eLearning Course

The collapse of Lehman brothers in 2008 highlighted the need for regulation around protecting client money and assets which have been a key priority for the Financial Conduct Authority (FCA) ever since.

The main aim of the FCA is to enable firms to reduce the risk of financial loss by identifying, assessing and mitigating risks. The regulation around the FCA’s Client Assets rules requires organisations to arrange for adequate protection of clients’ money assets when it is responsible for them.

The FCA’s Client Assets Sourcebook (CASS) sets out rules for firms to follow whenever the firm is in charge of client money i.e. a firm holds or controls money or assets from clients. CASS rules are designed to ensure the safety of client money and assets if a firm fails and leaves the market. The rules also state that client money and assets be kept separate from firms’ money and assets. This is vital to ensure that money can be returned to the clients promptly if the firm becomes insolvent.

There is an emphasis on firms to have adequate arrangements in place to minimise the number of risks to client money through fraud, poor administration, inadequate record-keeping or negligence. Effective record-keeping is also essential for complying with these requirements.

Failure to comply with CASS rules could lead to significant financial penalties for both firms and individuals.

Our new eLearning course, on client money and assets, covers the key principles and procedures which underpin the rules set out in CASS. The main modules are:

  • Foundation modules on the five key procedures reinforced under the client money and assets rules.
  • Separate modules on the specific requirements of CASS 7 (the client money rules) and CASS 6 (the custody rules).
  • Further modules on mandate rules, and the reporting and resolution pack rules.

Learners are also tested on their understanding to decrease the risks of breaching rules set in CASS. Find out more about our new course HERE.

The Client Money and Assets eLearning course joins our suite of FCA Compliance courses.

Financial Services: Why Compliance Matters

A market study published by the Financial Conduct Authority (FCA) has concluded that around six million customers ended up paying high prices and are not getting a good deal on their home or motor insurance. It is estimated that customers are paying on average £200 too much on premiums.

As has been evident in recent times, the FCA is continuing to scrutinize a number of industry practices, whilst issuing fines to firms failing to comply with regulation and becoming a key driver for change in the way firms treat their customers.

Role of the FCA

There are a number of strategic goals which the FCA is aiming to fulfil; these include protecting customers, enhancing the integrity of the UK financial services industry, and promoting healthy competition between financial services providers within the best interest of customers.

For firms, promoting a culture of compliance isn’t just about meeting regulatory obligations and avoiding substantial fines. It’s about raising your reputation in a competitive market based on the relationships that you build with your customers.

So which scenarios should firms consider wherein their conduct is subject to compliance and can affect their relationship with customers?

Dealing with Vulnerable Customers

As revealed by the market study conducted by the FCA, one in three customers who paid high prices showed at least one characteristic of vulnerability, such as having low financial resilience or capability. Protecting vulnerable customers has always been a key priority for the FCA. The FCA’s approach is based on the principle that firms do the right thing for the customer. The FCA’s Principles for Businesses require firms to treat customers with vulnerabilities fairly and to communicate with them in a clear, fair and non-misleading way.

The industry is responding well with a survey revealing that 94% of firms reported that the issue of vulnerable persons is being treated quite seriously or very seriously by their business.

Handling Customers’ Complaints

In June this year, we wrote about how poor complaints handling was costing firms within financial services, who paid out £2.75bn to compensate unhappy customers. Unhappy customers are also more likely to switch providers in a competitive market and leave bad reviews that can affect firms’ reputations.

To prepare for complaints from customers, firms must have a robust complaint handling process so they can deal with unhappy customers as per the guidelines set by the FCA. When the complaint process has been exhausted and failed to resolve the customer’s complaint to their satisfaction, the customer has the option to refer the complaint to the FOS – which could result in compensation awarded to the customer.

This means that firms must focus on alleviating the effect of customer complaints while ensuring compliance with the FCA regulation and keeping the complaint from being referred to the FOS.

Treating Customers Fairly

In recent times, the reputation of the Financial Services industry has taken a hit because firms have put profits before customer needs. Examples include mis-selling customer policies such as PPI or writing and publishing misleading policies.

The FCA requires that customers should be treated fairly at all times, especially when dealing with any firm who is regulated and authorised by them. Any firm found not to be treating its customers fairly can be subject to heavy financial penalties. The formal requirements laid down by the FCA are guided by six key Treating Customers Fairly (TCF) principles and include explicit and implicit guidance on the fair treatment of customers.

The FCA also recommends using customer feedback to help identify areas where firms and their advisers are or are not treating customers fairly and therefore areas where improvements are needed.

How can we help?

Training your staff to understand the significance of FCA regulations around dealing with customers is vital not only for compliance but also key in maintaining good relationships with customers.

Visit our website to find out how we can help you comply with FCA regulations.

Are You Doing Enough For Vulnerable Persons?

ccording to a recent survey, 94% of firms reported that the issue of vulnerable persons is being treated quite seriously or very seriously by their business. For years now, the Financial Conduct Authority (FCA) has raised awareness around the treatment of vulnerable persons by regulated firms. Since 2015, through a series of papers and reports, the FCA is focusing on improving the experiences of vulnerable persons while accessing financial products and services and highlighted the need for better conduct and best practice.

But what constitutes as a ‘vulnerability’ and how does it impact businesses’ relationship with customers?

Definition of a Vulnerable Person

According to the FCA:

A vulnerable person as someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.

Vulnerability could come in many forms. It can be long-term, sudden, or sporadic. The FCA advises that while the definition of vulnerability is broad, it is important to remember that the level of a customer’s vulnerability is very personal to their circumstances, and the timeframe for this potential vulnerability may vary.

Vulnerability could also be exacerbated by the policies and practices for regulated firms. That’s why the FCA requires firms to design their systems and processes which can make a huge difference to the ease with which vulnerable persons interact with them.

What Is Considered a Vulnerability

The FCA has divided the causes of vulnerability into four main categories:

  • Health: Changes in physical or mental health which may affect their understanding of financial services and the ability to make decisions. These could vary throughout their life, such as the onset of dementia, or could be a lifelong condition such as learning difficulties.
  • Life events: Stress from traumatic events such as bereavement of a loved one, loss of job or income, or divorce. These events could have a significant impact on a person’s ability to engage with their finances and make sound decisions.
  • Circumstances: The resilience to bear financial losses. This could include financial hardship, stress, and inability to pay bills. All of these could have an impact on a person’s health and wellbeing.
  • Capability: Overall understanding of financial services and products which can vary between individuals. Likely to affect customers with poor financial literacy or those who have migrated to a different country.

Treating Customers Fairly

The FCA’s approach is for firms to place customers at the heart of the business and doing the right thing for the customer. The FCA’s Principles for Businesses require firms to treat customers fairly and to communicate with them in a clear, fair and non-misleading way. Under the Treating Customers Fairly (TCF) initiative, the FCA has set out the expectations from firms. These include:

  • Consistent policies: Having appropriate policies and procedures in place across the business to consistently identify and support customers in vulnerable circumstances.
  • Sensitivity and flexibility: Approaching vulnerable customers in a sensitive and flexible way. This also includes creating no unreasonable barriers to change product, switch provider, submit a claim or make a complaint, and factoring vulnerability into product design, marketing and service provision.
  • Transparency in communications: Being as transparent as possible while dealing with vulnerable customers, giving clear information to customers so that they can make informed decisions.

So how can firms make sure they are consistently meeting expectations while protecting the most vulnerable customers?

Training Your Staff

The key is to take the time to listen and fully understand a customer’s situation so that you can best support them and provide them with the right guidance. Ensure that you are providing adequate training for your frontline staff on how to identify and interact with vulnerable persons. Training your staff is vital in ensuring that as a business you are treating vulnerable customers fairly and providing the correct advice.

As a good practice, many firms, such as RBS and Monzo, now have dedicated teams within customer services who are adequately trained in spotting and supporting vulnerable customers.

Vulnerability can affect any of us, at any point in time. While complying with the FCA’s requirements and keeping in line with regulation is important, but even more so for firms to consider and empathise with vulnerable customers and ensuring that you are undertaking a flexible approach to assist those that may need it the most.

NEW RELEASE: Vulnerable Persons eLearning Course

Customer services staff are the first point of contact for customers when dealing with financial services firms. Staff are required to correctly advise customers and identify ‘vulnerabilities’ which may expose the customers to financial detriment.

Training your staff is key in helping to understand the significance of ‘vulnerabilities’ and the steps they are required to take as per the Financial Conduct Authority (FCA) guidelines on safeguarding vulnerable persons. Firms must enable staff to understand FCA requirements on treating customers fairly while fulfilling their legal, business and social responsibilities.

Our new, immersive eLearning course explores how staff can use key communications techniques and make the right decisions, supporting vulnerable persons while meeting their compliance obligations. Go behind the scenes at the fictional bank, TrustUs and look at the various scenarios detailing vulnerabilities and how to support customers in vulnerable situations. Take the challenge to earn top Trustzar star ratings on the service you provide to customers. Your goal is to achieve a 5-star rating while correctly advising vulnerable customers and complying with the FCA’s requirements.

Find out more about our new course HERE.

The Vulnerable Persons eLearning course joins our suite of FCA Compliance courses.

NEW RELEASE: Financial Sanctions eLearning Course

Financial sanctions are part of UK’s national security and foreign policy and aims to prohibit organisations from providing financial resources to persons or organisations engaged in criminal activities, including terrorism.

While the Office of Financial Sanctions Implementation (OFSI) is in charge of enforcing financial sanction orders and issuing authorisations, it is the responsibility of the Financial Conduct Authority (FCA) to ensure that businesses have adequate systems and controls in place to mitigate the risks of financial crime and ensure that firms and individuals complying with regulation.

Failure to comply with financial sanctions is considered a criminal offence, punishable by a criminal conviction or a financial penalty imposed by OFSI.

Our newly-released immersive, interactive course looks at the UK’s financial sanctions regime and the role played by the OFSI, the FCA and HM Treasury (HMT). Learners will go behind the scenes at fictional firm Financeum, to explore the effect of poor practices around financial sanctions in governance, risk assessment, screening and reporting. Moving through scenario-based questions, take the right decisions to reduce the risk of a compliance breach and avoid a monetary penalty.

Find out more about our new course HERE.

The Financial Sanctions eLearning course joins our suite of courses on FCA Compliance.