Fair treatment of customers

Above all, customers expect financial services and products that meet their needs from firms they trust.

Consumer outcomes

There are six consumer outcomes that firms should strive to achieve to ensure fair treatment of customers. These remain core to what we expect of firms.

• Outcome 1: Consumers can be confident they are dealing with firms where the fair treatment of customers is central to the corporate culture.
• Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.
• Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.
• Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances.
• Outcome 5: Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect.
• Outcome 6: Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

Regulatory responsibilities

Firms are responsible for making sure customers are treated fairly. Our principles [1](PRIN[2]) include explicit and implicit guidance on the fair treatment of customers. Principle 6 says: ‘A firm must pay due regard to the interests of its customers and treat them fairly’, but other principles also apply to this area of business behaviour.

These principles apply even for firms that do not have direct contact with retail customers. Risks and poor conduct can be carried from wholesale to retail markets.

Guidance for firms on the fair treatment of vulnerable customers

In February 2021, we published finalised Guidance[3] setting out our view of what firms should do to comply with their obligations under the Principles and take particular care to ensure vulnerable customers are treated fairly. 

The Guidance sets out the types of actions firms can take to achieve this, and includes examples of how to put the Guidance into practice. 

Because anyone can find themselves in vulnerable circumstances at any time, our Guidance is relevant to firms serving retail customers, including some business customers, regardless of the firm's size or sector.

Sole advisers

Sole advisers have the same responsibility as larger firms to demonstrate the fair treatment of customers. This responsibility cannot be delegated away but it should be proportionate and relevant to the size of your firm.

For example, we would not expect to see the same level of documentation or analysis of management information for a sole adviser as we would expect in a firm with a large team of advisers.

Customer feedback

Customer feedback can help you identify where you are treating customers fairly and where improvements are needed. Remember that a satisfied customer is not necessarily being treated fairly. Feedback responses helps flag risks for you to consider.

• Consider how and when you could use the feedback to get the most from it.
• Ask unhappy or disgruntled customers – their opinions and reasons for complaint or termination should matter to you.

If you use customer feedback, think about the questions you are asking and if they help you identify areas where your firm and its advisers are or are not treating customers fairly and therefore areas where improvements are needed.