Customer Duty - Some Observations
The newly introduced Customer Duty rules from the FCA bring about arguably the most far-reaching regulatory landscape change in many decades (a new principle).
These rules, on the back of the ‘price walking’ reforms and product rules will mean that firms attention to customers and service will need to see a quantum shift in how customers are treated, not the usual platitudes and tinkering around the edges.
And it’s not just about call centres! It’s a culture change in the whole business.
The recent strongly worded ‘Dear CEO’ letter provides evidence that the FCA is concerned that the industry is not moving fast enough with previous regulations on products. There is likely to be major fallout from this. Expect to see sanctions and potentially fines.
This change impacts brokers as much as manufacturers. How many firms have appointed an independent NED to be Customer Duty champion? Few I suspect. How many are ready to have Boards approve plans for Customer Duty implementation by end of October - again I suspect not many.
Brokers, are you working with your insurers to find the proof you need to evidence you are providing products that are good value for example? Are you ready for a tsunami of insurers canning products that don’t meet their good value tests? Have you read your T&C’s lately? - ask young adults, friends, and grandparents to read them and explain. If they are unable to, you are probably not going to meet the new regulations.
It's time that selling online faced the same scrutiny and rules as those who make recommendations to customers. Time to stop hiding behind non-advised business and get back to building trust.
Insurance is complex - try properly explaining the intricacies of insuring a van that carries own goods used for commuting to the workplace. Look how many SMEs are ‘properly’ covered - about 1 in 10!
Insurance mostly does a good job and mostly pays out, sadly that’s not the impression consumers have because they didn’t understand what they bought.
We are in the last chance saloon here, let’s not fail. #insurance #fca #customerduty