February 22, 2012 by Huntswood
by Paul Scott, Director of Consulting
The FSA’s first attempt at the Mortgage Market Review was roundly criticised, so much so that Adair Turner took a personal interest, thinking it important enough to write the introduction to the latest Consultation Paper. This time, the proposals have received general acceptance, but will still mean major changes for firms. This is the first blog in the series on the MMR and, here, I will focus on responsible lending.
Forget the proposed new rules for a moment; our experience through engagement with major lenders is that the standards expected of firms has already increased.
One of our clients is currently facing major challenges around its advised sales process for mortgages. We have worked extensively with this bank to redesign, rebuild and embed a far more rigorous suitability assessment.
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Posted in Huntswood, Huntswood Consulting, Paul Scott | Tagged consulting, Huntswood, Mortgage Market Review, Treating Customers Fairly | Leave a Comment »
January 30, 2012 by Huntswood
This article was first published in FS FOCUS issue 56 www.icaew.com/fsf…
If financial advisers thought that they would be unaffected by the Financial Services Authority’s (FSA) latest intervention in product regulation, they will be disappointed. The regulator not only plans to tighten rule relating to the development of products, but also their distribution to customers.
The implications for financial advisers and planners are not exactly clear at this stage, but it could affect the number and range of products that they can sell, who they can sell them to and how. This environment is likely to favour firms with good client relationships, a deep understanding of their needs and effective segmentation processes in place.
From principles to rules
It is ten years since the FSA first launched its Treating Customers Fairly (TCF) initiative aimed at restoring customer confidence in the financial services industry. This was refined in 2006 with a list of six consumer outcomes to clarify the TCF objectives that firms should be working towards. Back then, FSA chairman Callum McCarthy hoped that this principles-based initiative would be sufficient to ‘incentivise’ providers of financial services to ‘act responsibly’.
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Posted in Huntswood, Huntswood Consulting, Paul Scott | Tagged consulting, financial services, FSA, Huntswood, Paul Scott, product intervention | Leave a Comment »
January 12, 2012 by Huntswood
We have just entered 2012 and as an MBA student you are probably thinking it’s time to start the job hunt and if not, you should be! Competition is always fierce for the best jobs on the market and there are a few things to do before you start applying for them to give yourself the best change of success.
The first task is the most obvious but also the most critical: write a good CV. This is particulary important as this is a company’s first impression of you! You will find it easier to write everything you have done down first, then go through and add dates, company names and job titles. Be specific; include the countries in which you gained your experience and make sure there are no unexplained gaps in your history, detailing the month as well as the year is recommended.
Next add in your education. Include the date you started and graduated for every qualification including qualifications you received before you went to university (equivalent to UK A-Levels). You must include grades! All too often we receive CVs with no grades – some of these candidates had excellent results but had neglected to write it down. Employers always immediately assume the worst if you fail to include your grade.
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Posted in Huntswood, Huntswood Mangement Consultancy, Huntswood Recruitment, management consultancy, MBA | Tagged Consultancy jobs, consulting, executive consulting, financial services, Huntswood, Huntswood Recruitment, jobs, management consultancy, MBA, recruitment | Leave a Comment »
January 10, 2012 by Huntswood
With the requirements for consultants becoming ever more stringent, many consultancies are incorporating tests into their interview process. There are four main types of test: personality, logical, numerical and verbal.
Personality:these tests use a variety of situations and assess how you would react, how you work with others, what frustrates you and how you cope with pressure. Typically, a question is formed of a statement and you are required to select the most appropriate from options ranging from strongly agree to strongly disagree.
Logical reasoning:the aim of this test is to assess your problem solving ability. The tests revolve around recognising patterns and working out what is next in the sequence. You will normally be given a row of 4 pictures and 5 possible answers. An example is below:
Numerical reasoning:in this test you are provided with data normally presented as tables, charts andgraphs: the aim is for you to perform calculations to answer a set of questions given.All the information you need can be obtained by manipulating this data. Some erroneous data is also usually provided to assess who can sort the relevant from irrelevant information.
Verbal reasoning:in this test you will be required to quickly read a sample of text and answer questions which are most commonly ‘true’, ‘false’ or ‘cannot say’ based ONLY on the text you have just read.This test not only shows your ability to quickly assimilate information and understand its meaning, but also the competency with which you speak English, should you be non-native, as the test commonly contains business terminology.
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Posted in Huntswood, Huntswood Learning and Development, Huntswood Mangement Consultancy, Huntswood Recruitment, Huntswood Resourcing, management consultancy | Tagged Huntswood, Huntswood Recruitment, Learning and Development, management consultancy, psychometric testing, recruitment, training | Leave a Comment »
December 20, 2011 by Huntswood
One unexpected outcome of the long awaited Mortgage Market Review is what looks like a squeeze on mortgage brokers. The heart of the paper is enhanced affordability checks and the Review says the FSA is not proposing to prevent income and expenses checks being done by intermediaries, “but the lender will be responsible for ensuring that verification of income happens in every case and will be held to account if it does not.”
The likelihood is that some lenders will therefore move advice ‘in house’ as they will carry the can in any event.
Overall the MMR has turned out to have reached a somewhat more comfortable place than the previous document, with most stakeholders viewing the outcome as acceptable although some people will ask, “Aren’t lenders doing this already?”
The Review requires lenders to only grant mortgages where there is a reasonable chance of repayment out of income and without relying on future house price rises.
Lenders will also be required to take account of market expectations of future increases in interest rates. They can’t just take a guess at it either but must use published material such as the forward sterling rate published on the Bank of England’s website.
Self certification mortgages and fast tracked mortgages will be banned, which is a significant move because at the height of the property market almost half of all mortgages were done on this basis.
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Posted in Huntswood, Huntswood Consulting | Tagged Fast Tracked Mortgages, FSA, Huntswood, John Howard, Mortgage Lenders, Mortgage Market Review, Self Certification Mortgages | Leave a Comment »
December 9, 2011 by Huntswood
Companies need to deliver revenue that increases profitability; however, this should be linked to the way a company treats their customers with the aim not only to fulfil the standards demanded by the FSA, but also to build credibility in long term relationships with their customers.
Every company should be asking themselves, “are we looking at TCF implementation holistically in our work streams? Are our current TCF activities a part of our strategic planning? Are we achieving the six TCF outcomes in the right way?”
Many would answer, “we are creating satisfied customers but we’re not embodying TCF outcomes in all our interactions with our customers.” This was the case for our client, the retail division of a UK bank, who needed to apply a different TCF strategy to truly engage with their customers.
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Posted in Huntswood, Huntswood Learning and Development | Tagged FSA, Huntswood, Learning and Development, multi work stream programme, strategic planning, TFC, Treating Customers Fairly | Leave a Comment »
November 17, 2011 by Huntswood
A lack of complaint handling capability will always result in poor service, but imagine the impact for a company facing a huge backlog of complaints.
Huntswood was approached by a company which handled information requests under the Freedom of Information Act (FOI), but due to a public awareness campaign, they were overwhelmed by a rising number of requests which lead to delays, complaints and huge backlogs.
With this in mind, Huntswood implemented a new triage approach to clearing the backlog as well as bringing in expert case handlers and a project manager to fix the immediate crisis. This was suplimented by a bespoke training program to achieve a long-term solution to the authorities’ challenges.
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Posted in Huntswood, Huntswood Consulting, Huntswood CSD | Tagged complaint handling, Customer Experience, Freedom of Information Act, Learning and Development, training, Training Program, Triage approach | Leave a Comment »
November 15, 2011 by Huntswood
How is your company tracking customer experience? Are you just looking at sales data? If your answer is ‘yes’, that might show you how you are doing in a general way, but it will not show you how you can improve your customer experience throughout the process. The thing is, if a customer has an okay (read meets low expectations) customer experience, then she’ll stay a customer. But she won’t tell her friends that you are fantastic and they should come to you, too.
How do you measure how you are doing compared to your competitors in the market place? How do you know if you can exploit a weakness in the landscape or if you have to play catch-up? You have to benchmark, of course, but that’s easier said than done. How do you go about benchmarking customer service, something infinitely less tangible than sales data or other industry statistics?
Paul Scott, Huntswood’s Director of Consulting, remarks that, “Often companies do not know how to benchmark their customer service and so do not. However, there are plenty of techniques and strategies they can use to advance their customer service strategy.”
1. Get your consultant to compare you against their other clients. This is one of the most common “traditional” methods. It is also one of the least effective. Consultants can take the information they’ve gathered from their various other clients and figure out how you rank against them. They’ll anonymise this data, of course.
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Posted in Huntswood Learning and Development | Tagged benchmarking, Benchmarking customer service, Customer Experience, Learning and Development, Tracking customer experience | Leave a Comment »
November 14, 2011 by Huntswood
The Financial Ombudsman Service has just released its discussion paper on the publication of its decisions. This a major concern for the industry at the moment and divides opinion.
Certainly, firms want greater clarity over FOS decision making, but how will publishing decisions achieve this? It will require an easily searchable database which firms and consumers can use to flush out a point or a case that is similar to theirs.
FOS prefers that only Ombudsman decisions are published and not those of its adjudicators, which is just as well as there are around 3,600 adjudications each week at present. Imagine trying to search that database in a few years’ time; even if just the Ombudsman decisions are published, there will be around 400 every week to add to the list. Is this still too many cases to create a valuable resource?
I suppose it depends on what you see as the purpose of publication in the first place. The unique aspect of the Ombudsman’s role is to take into account relevant FSA regulations but always to decide cases on what is fair and reasonable in the circumstances of each case. This is very much a matter of judgement, so in my mind the main reason for publishing decisions is to demonstrate what the Ombudsman regards as ‘fair’ and ‘reasonable’.
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Posted in Huntswood, Huntswood Consulting | Tagged Financial Ombudsman Service, FOS, Huntswood, John Howard, regulatory changes | Leave a Comment »
November 9, 2011 by Huntswood
The Retail Distribution Review’s (RDR) new definition of advice will have certainly unnerved financial advisors, but is the regulator’s definition sufficient for today’s market and does it reflect what customers think is advice?
Under the RDR there will only be two types of advisor for investment products: there will be fully independent advisors that must be fee based and able to make recommendations on a comprehensive and fair analysis of the relevant market with the ability to provide unbiased, unrestricted advice and there will be advisors that will be providing ‘limited advice’ and, therefore, must say so.
But does this match what the customer anticipates when they see an advisor? I think the nature of the relationship can be quite complex. When a customer first meets an advisor they can have a wide variety of expectations which might make up the basis of the contract between the advisor and the client.
At one extreme the customer can say, “I already understand everything there is to know about this product and I am prepared to buy it without any input from you.” The regulator and the industry define this as ‘execution only’ and responsibility for the purchase rests almost entirely on the customer.
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Posted in Huntswood, Huntswood Consulting | Tagged business performance, financial advisors, Huntswood, John Howard, Professional services business, RDR, Retail Distribution Review | Leave a Comment »
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