So, we now have enough information and feedback from the first round of engagement from the FSA in the North West to know how the process will work across the country. The Regulators campaign plan thus far is as follows:
1. TCF Letter - This is "First Contact" and invites the Firm to attend a TCF Roadshow.
2. TCF Roadshow - All Firms who receive the letter are expected to attend the roadshow. Anecdotal evidence suggest that failure to attend the roadshow causes a Firm to receive greater scrutiny later in the process. During the roadshow the FSA runs round table discussions and case study exercises to explain the principles and goals of TCF.
3. TCF Assessment - All Firms who are asked to attend the roadshow then receive an assessment a few weeks later. This is conducted as an interview with the Firm's Principle, lasts about an hour and takes one of three forms: a. Telephone Interview; b. Face to Face at a central venue; c. Face to Face at the Firm's Office. During the interview the Adviser will be asked a series of questions designed to enable him or her to demonstrate that TCF has been successfully implemented. So far the feedback that I have received from about 40 Firms suggests that the telephone interview is the least pleasant experience simply because it is more difficult to communicate the complexities of Leadership Principles and TCF over the phone.
4. TCF Validation Audit - 25% of all Firms will receive an on site validation audit. Early feedback indicates that these can be in depth. I was contacted by a Firm who had their visit last week. The FSA Auditors were there from 9:30 am to 7:10 pm. They checked 10 client files, audited the MI data and T&C data and interviewed the Principle. Although this was not an unpleasant experience for the Firm in question it does demonstrate that TCF is being taken very seriously by the Regulator.
I am attending a TCF validation visit next week so I will be able to feedback on this experience in a later post.
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