1. September 9, 2008 Make it happen Treating Customers Fairly Steve Carruthers, RBS Intermediary Partners and Frank Eve, Frank Eve Consulting The RBS Intermediary Roadshow

2. 2 Making a difference to your customer

3. The RBS Intermediary Roadshow 3 Welcome & session objectives What is TCF & its part in the mortgage sector? The lender view The intermediary view Help available Question & Answer / Discussion

4. The RBS Intermediary Roadshow 4 What is TCF? Sarah Wilson, Director for Treating Customers Fairly, FSA: “TCF is a principles based initiative which challenges firms operating in retail financial markets collectively to make a step change in their treatment of customers. We are asking firms to focus on outcomes rather than process and detailed rules, and have defined six consumer outcomes against which firms should measure progress.”

5. The RBS Intermediary Roadshow 5 The 6 TCF Consumer Outcomes 1.Consumers can be confident they are dealing with firms where the fair treatment of customers is central to the corporate culture 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 3.Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale

6. The RBS Intermediary Roadshow 6 The 6 TCF Consumer Outcomes……. (cont.) 4.Where consumers receive advice, the advice is suitable and takes account of their circumstances 5.Consumers are provided with products that perform as firms have led them to expect, and the associated service is both of an acceptable standard and as they have been led to expect 6.Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint

7. The RBS Intermediary Roadshow 7 How does TCF apply to mortgage sector firms? Key areas for mortgages are: Product design Disclosure Remuneration strategy

8. The RBS Intermediary Roadshow 8 TCF – the lender view TCF is not new – evidencing existing practices Not about being ‘nice’ to or creating satisfied customers FSA will not arbitrate over what products consumers want or are sold Does not absolve consumers of responsibility Not about collecting large amounts of MI By 1 st December 2008 we will demonstrate that: –TCF is being integrated into our business culture –Appropriate MI and measures are in place to test whether we are treating customers fairly & delivering the 6 outcomes –There are processes in place to monitor the MI to enable the right people to take action

9. The RBS Intermediary Roadshow 9 TCF – the lender view Lenders & distributors will not ‘police’ each other A partnership approach – share key data/MI Keep it simple – help each other to evidence An evolving & ongoing programme We do ‘walk the talk’ as a key priority

10. The RBS Intermediary Roadshow 10 TCF for the Intermediary FRANK EVE Chairman TCF Lender Forum

11. The RBS Intermediary Roadshow 11 TCF for the Intermediary Specifically TCF aims to: –help customers fully understand the features, benefits, risks and costs of the financial products they buy –minimise the sale of unsuitable products by encouraging best practice before, during and after a sale The FSA ‘Conduct of Business Rules’ support TCF To satisfy FSA requirements extra steps required to show how you’re implementing TCF throughout your business.

12. The RBS Intermediary Roadshow 12 TCF for the Intermediary FSA doesn’t lay down any standard way in which TCF should be assessed and implemented, but highlights key areas within product life cycle where it’s a good idea to have extra checks in place. These include: –product design –financial promotion/marketing practices –the sales process –information and customer support after the point of sale –complaint handling

13. The RBS Intermediary Roadshow 13 TCF for the Intermediary In practice this means identifying potential gaps (Gap Analysis) in TCF practice and developing procedures and checks to plug these in the following areas: –Staff training/awareness of TCF –Sales and marketing material –Product understanding –Advice and sales process –Fact find and flow of information to the client (including after- sales) –Complaint handling –Remuneration/incentives –Risk assessment of TCF non-compliance –Record keeping and Management Information

14. The RBS Intermediary Roadshow 14 TCF for the Intermediary www.tcfinfo.co.uk –Free practical, user-friendly, online resource –Plain English guides, tips and tools and checklists on all the areas previously outline –You can download any of the material for own-branding and/or staff training – for free –Funded by major mortgage lenders & supported by CML

15. The RBS Intermediary Roadshow 15

16. The RBS Intermediary Roadshow 16 TCF for the Intermediary Example checklist can be used for Gap Analysis and auditing Will email attendees to offer free registration which entitles them to receive free e-newsletters and updates on relevant TCF matters

17. The RBS Intermediary Roadshow 17 Summary

18. The RBS Intermediary Roadshow 18 Question & Answer

19. The RBS Intermediary Roadshow 19 TCF in practice…. FAIR PLAY?

20. The RBS Intermediary Roadshow 20 Is this TCF? A customer goes into a branch of Acme Mortgages plc and applies for a mortgage but computer says NO!

21. The RBS Intermediary Roadshow 21 Is this TCF? Acme plc Mortgage Business has the highest level of arrangement fees in the industry

22. The RBS Intermediary Roadshow 22 Question & Answer