PRESS RELEASE 2 February 2011
FINDINGS OF MYSTERY SHOPPING EXERCISE
The Jersey Financial Services Commission (the ”Commission”) has today published a report of its findings from a second mystery shopping exercise on the suitability of advice and sales process provided by regulated investment advisers during 2010.
John Harris, Director General of the Commission, said,
“In July 2008, the Commission issued revised Codes of Practice for Investment Business and we decided to repeat the mystery shopping exercise to see how the Codes are being followed in practice and whether lessons had been learned from the previous mystery shopping exercise.”
The mystery shopping exercise was conducted on behalf of the Commission by Deloitte LLP and GfK Mystery Shopping,
who recruited individuals to undertake the mystery shopping fieldwork.
The report covers a programme of mystery shopping which was based on two scenarios. These scenarios were for a potential investment of a lump sum of £120,000 or for a ‘health check’ of the mystery shopper’s current financial position including existing financial products. The Commission received 17 mystery shopping reports which were analysed against regulatory benchmarks.
In summing up the findings, Mr Harris said,
“It was pleasing to see that there had been a marked improvement in the number of firms sending out suitability letters and providing clear and customer friendly sales literature compared to the mystery shopping exercise undertaken in 2007”.
“However, there are still some areas for improvement in the advice process, in particular, transparency regarding fees, charges and commissions, comprehensively assessing the customer’s complete financial position and risk profile. The focus of the meetings should be to independently assess the customer’s financial position and provide recommendations based on their needs, not on the selling of products.”
The report does not name those firms involved in the exercise. However, the Commission has provided detailed feedback to each firm sampled.
A copy of the report is available on the Commission’s website by clicking here.
- Ends -
For further information please contact: -
David Banks - Director, Securities
Jersey Financial Services Commission
Tel: + 44 (0) 1534 822048
Fax: + 44 (0) 1534 822047
NOTES TO EDITORS
- The Market Research Society (MRS) defines mystery shopping or ‘mystery customer research’ as: ‘The use of individuals trained to experience and measure any customer service process, by acting as potential customers and in some way reporting back on their experience in a detailed and objective way.’
- GfK Mystery Shopping is an independent market research company who have performed similar work for the UK’s Financial Services Authority and also assisted the Commission in the first mystery shopping project in 2007.