TCF Policy
Background
Treating customers fairly is not only an FSA guiding principle, it is a business essential for the future growth of ARCH.
Treating Customers Fairly (TCF) needs to be part of a disciplined process that helps ARCH to focus on developing and delivering excellent products and services to all its end customers. Every member of staff needs to understand, believe in and conduct their business with TCF in mind.
Strategic Vision
ARCH’s long term strategic vision is to provide investment products which offer attractive returns with lower levels of volatility; offering a wide range of technologically advanced IT; and providing first class Compliance and Risk Management services.
How TCF affects ARCH’s business
TCF gives rise to obligations in all departments and divisions of ARCH. The objectives might be summarised by department as follows:
Board: To set the TCF culture and communicate standards of customer care down through the firm. Ensure TCF-related issues are included at meetings.
Product Design: When undertaking product design the following are particularly relevant:
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Should identify the target market, namely which types of customer the product or service is likely to be suitable for;
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Should stress test the product to identify how it might perform in a range of market environments and how the customer may be affected; and
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Should have in place the systems and controls necessary to manage adequately the risks posed by the product.
Trading and sales: To deal at fair and transparent prices, provide best execution where relevant, and timely execution. Observe conduct of business rules relating to dealing and managing.
When providing information to distributors the following are particularly relevant:
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Should make clear if that information is not intended for customer use;
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Should ensure that the information is sufficient, appropriate and comprehensible in substance and form, including considering whether it will enable distributors to understand it enough to give suitable advice, and to extract any relevant information and communicate it to the end customer.
When providing information to customers the following are particularly relevant:
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Should pay regard to the target market including its likely level of financial capability;
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Should take account of what information the customer needs to understand the product, its purpose and the risks, and communicate information in a way that is clear, fair and not misleading; and
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Should have in place systems and controls to manage effectively the risks posed by providing information to customers.
When selecting distribution channels the following are particularly relevant:
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Should decide whether this is a product where customers would be wise to seek advice; and
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Should act to close a particular distribution channel if there is significant cause for concern in its operational methodology.
Marketing: TCF must be embedded in the marketing literature. ARCH must ensure that all financial promotions are clear, fair and not misleading.
Compliance: To build TCF into the procedures, particularly the compliance manual and to continuously monitor ARCH’s adherence to TCF principles and outcomes. To act as a central consulting point internal to the firm for TCF queries and the main point of contact with FSA on TCF matters.
IT: To provide a continuous and reliable service to the firm as a whole to allow clear and timely communications with clients. Develop management information systems to allow assessment and monitoring of data which can assist the firm in measuring its adherence to TCF principles and outcomes.
Operations: To minimise the incidence of errors in respect of administration, clearing, settlement etc. Ensure reconciliations are performed timely and correctly.
Risk: To develop and document clearly procedures to monitor and control exposures of the firm and its customers to various types of risk.
HR: To vet new employees and ensure competence appraisals contain a TCF assessment element. Bonuses will be affected by TCF outcomes.
Measuring and monitoring success
ARCH intends to continually collect, analyse and use information about its client service and product sales to identify ways in which the firm can improve the service it provides to its clients. ARCH intends to escalate information to senior management to ensure appropriate consideration of significant matters.