The

UK’s national financial regulator has transferred its team of “treating customers fairly” specialists to its general operations, a move that has been welcomed by the private client broker trade lobby concerned about the costs of dealing with TCF initiatives.

The Financial Services Authority announced this week that intends to integrate its TCF team of inspectors into the regulator’s “core” activities. TCF was designed to cajole financial firms such as brokers and wealth managers into delivering better service quality and handle consumer complaints rapidly and efficiently. The FSA can, in some cases, punish companies deemed to fall short.

The move to drive up service standards to customers, such as in providing prompt and accurate details on financial products, comes at a time when the financial industry around the world faces an expected surge in regulations because of the credit crunch.

Even before the economic crisis, regulators in areas such as the European Union had imposed higher costs on firms through programmes such as the MiFID rules on financial markets.

The UK's Association of Private Client Investment Managers and Stockbrokers said it warmly welcomed the FSA’s move to put the TCF initiative to bed and said the programme had encouraged often onerous regulations to be imposed on firms without assessing the costs and benefits on a case-by-case basis.

TCF was an umbrella term under which a broad range of different regulations and requirements could be imposed on firms without those measures having to be individually assessed, a spokesman told WealthBriefing yesterday.

“Our concern is that a series of one-size-all regulations have been announced under the banner of TCF,” he said.

The FSA announced that it will accelerate the full integration of TCF into core supervisory work but pointed out that the initiative remained “central to the FSA's retail strategy”. It said that from January, 2009, delivery of TCF will be tested as part of firms’ usual supervision.

The FSA has said that under the programme, firms should demonstrate that senior managers should instil a culture where they understand what treating customers fairly means and that staff do so at all times; measure performance against TCF issues and quickly and promptly handle mistakes and complaints.

In an earlier statement, APCIMS said: “We believe there are key lessons for the FSA to take on board from this episode: to regulate an industry effectively the regulator must fully understand how it works and a cost benefit analysis must be carried out.

“TCF has been one of the largest regulatory initiatives undertaken by the FSA and we have argued from the outset that disconnecting this process from the better regulation principles of full formal consultation and cost benefit analysis was wrong”.