Client Success Story

Developing a Compliant Sales Framework

Background

One of the UK’s leading utilities companies, selling energy to both commercial and consumer markets, identified a weakness in their product portfolio relating to the sale of product insurance cover. Due to the nature of the product our client subsequently registered with the FSA as a secondary intermediary and established a compliance unit to support this area of the business.

The Challenge

The client’s foremost concern was ensuring that business activity was compliant with relevant FSA regulation. In particular, they wanted greater clarity regarding how to apply the FSA’s “clear, fair and not misleading” principle as well as more explicit regulation regarding non-advised sales. The client also wanted to resolve disparities in the approaches adopted by their marketing and regulatory functions.

The Solution

Huntswood has delivered a comprehensive programme of training and advisory services for the client, to enable them to address these challenges.

Huntswood led a number of workshops with key stakeholders, developing the necessary compliance framework and associated sales process to support the product launch, as well as providing sales training for the 450 sales agents.

Huntswood also facilitated an interactive on-line training ‘Academy’, delivering e-briefings, a series of learning experiences, a comprehensive assessment tool and a discussion forum. In addition, Huntswood developed a training workshop for the client, which took the learning from the e-briefings and consolidated it into an interactive half-day workshop. The workshop addressed two key areas, financial promotions and sales advice, as well as providing guidance on how to embed the ICOB regulation into the client’s culture.

The client also required additional support to provide financial promotions compliance policy advice. This briefing was delivered by a specialist regulatory consultant to the client’s regulatory compliance manager and marketing managers. In addition to the briefing, Huntswood developed and delivered a financial promotions workshop to increase knowledge and understanding of the regulatory implications of financial promotions.

The Result

As a result of the training interventions and on-site support Huntswood improved awareness of ICOB across the organisation and assisted middle and senior management, sales and marketing in understanding the fundamental requirements to be compliant in a non-advised selling environment. Furthermore, the marketing team were able to review financial promotions from an FSA, and ultimately consumer, point of view.

The programme resulted in an immediate improvement in the agents’ confidence in selling general insurance (GI) products, with GI sales improving by over 40% for many participants.

The provision of a ‘heatmap’ for the client’s senior management also enabled them to identify high risk areas with regard to GI sales and implement appropriate risk mitigation initiatives.

Huntswood’s View

The introduction of principles based regulations (PBR) and the FSA’s proposed revision of the financial promotion rules should be seen as an opportunity for regulated firms to focus their resources against the operations that pose the greatest risk.

Financial promotions should comply with the regulators principle of “clear, fair and not misleading”. Regulated firms should critical test those controls which they use to manage regulatory risk, and monitor the outcomes of key processes against the associated regulatory expectation. Huntswood feels that this will provide increased flexibility to organisations, enabling them to design products that are innovative, with associated sales processes and literature that is both compelling and compliant.