Welcome to Conduct & Risk Guidance

Welcome to our Conduct & Risk Guidance, designed to help you understand more about Conduct & Risk and how to applies it to your business across the six key stages of the customer journey lifecycle.

Introduction to conduct risk

What is poor conduct?

Poor conduct is any action of a regulated firm, or individual working in it, that leads to customer detriment. This can be intentional, such as an individual deliberately taking actions which they know will result in customer detriment, or unintentional, such as weak processes.

Why is good conduct important?

Good conduct increases the chance that customers will experience good outcomes. This is done by putting the interests of the customer at the forefront of decision making. As well as being the right thing to do, any acts of poor conduct may place your brand and business at risk commercially.

What are the foundations of good conduct?

Every employee whose role can impact customers, which includes most employees even if they are not directly customer-facing, has a code of conduct they must follow. This code of conduct states:

  1. You must act with integrity
  2. You must act with due skill, care and diligence
  3. You must be open and cooperative with our regulators
  4. You must pay due regard to the interests of customers and treat them fairly
  5. You must observe proper standards of market conduct

Further guidance on these rules can be found within the FCA’s Code of Conduct sourcebook (COCON).

Why is good conduct also good business?

A culture of good conduct benefits your customers and employees, as well as providing commercial benefits to your own business.

  • Customers: by putting the customer first, they should have better outcomes. This may strengthen your brand by making you more appealing to other potential customers who may have received a recommendation from an existing customer.
  • Employees: research shows that 90% of employees in purpose-led organisations feel engaged in their work. This compares to just 32% of employees in companies which are not as focused on purpose.
  • Commercial: with a clear focus on customers, your business may be more efficient and should see improvements in both premium income and bottom line. Acting in the customer’s best interests, and providing a service which customers value, is the best marketing a brand can have.

Key questions to consider

  • How robust are your ‘demands and needs’ quality assurance measures, for both individuals and teams, in protecting the customer from suffering loss or damage because their needs have not been met?
  • As part of your induction programme for new starters do you validate, record or test their knowledge of the FCA’s Code of Conduct (COCON) sourcebook?
  • Unintended customer detriment may occur from use of outdated IT systems (e.g. lack of detailed case file handover to colleagues). As a business what additional steps do you apply to ensure good customer outcomes to overcome any IT system issues?

Managing conduct risk across the six stages of the customer journey lifecycle

For each stage of the customer lifecycle we’ve provided information on what good conduct looks like, and why it’s important.

We’ve also provided key questions you can ask yourself to ensure your customers are an important factor in any decisions you make.

To find out more, please review each of the six stages of the customer journey lifecycle:

  1. Financial promotions and literature
  2. Sales
  3. Demands & needs
  4. After sales experience
  5. Complaints
  6. Renewals

Any questions

If you've any questions, please email governanceriskandconductadvice@axa-uk.co.uk