Rebecca Aston reflects on the awareness and perception of Chartered status
Knowing your customer is something that has been spoken about by the Financial Conduct Authority for many years. It is used as way of ensuring that customer needs are met and that they have been properly assessed before a professional provides them with advice, recommendations, or sells them a financial product. However, beyond this, how well do firms really know their customers? What is important to them when seeking professional advice and why would they choose one firm over another?
Attempting to answer these questions has resulted in the CII undertaking a biannual Chartered Perception Index survey – now in its fourth iteration – which seeks to track awareness and perceptions of the corporate Chartered title; and customers’ propensity to choose a Chartered firm in both consumer and business markets.
The most recent wave of the survey – undertaken in March 2021 – revealed that 69% of individual customers and SMEs would choose a Chartered firm when seeking professional financial or insurance advice, over a non-Chartered firm.
While Chartered status is a public commitment to professional standards, there are also many excellent insurers, brokers, underwriting agents and financial planners that are not Chartered, so looking beyond the badge at why customers have a greater propensity to choose a Chartered firm will give valuable insights to all types of firm – both Chartered and non-Chartered.
Firstly, the Chartered Perception Index reveals the key drivers for customers and businesses to choose a Chartered firm. These, in order of significance, are: accreditation by a professional body (75% of consumers, 62% of businesses); commitment to an ethical code of conduct (55% of consumers, 45% of businesses); and commitment to good practice and good customer outcomes (54% of consumers and 47% of businesses). Additional, but less significant, drivers include firms investing in their employees to ensure their knowledge and skills are up to date and giving back to society in some way – for example through philanthropy or corporate social responsibility activities.
Just as important as understanding why a customer would choose a Chartered firm is asking why they would not. These reasons include: a perception that there is no real difference between Chartered and non-Chartered firms, and that good advice is dependent on the individual practitioner (24% of consumers, 26% of businesses); a lack of awareness of any benefits associated with choosing a Chartered firm (29% of consumers, 27% of businesses); and the belief that Chartered firms are more expensive (27% of consumers, 29% of businesses).
Overall, the research demonstrates what customers are looking for when seeking professional advice:
- Reassurance (in the form of oversight and regular verification of standards).
- A business with sound ethical principles and a culture that encourages ethical behaviour.
- That their interests will be taken into account and they will have a positive experience.
- Value for money.
While any firm can use these insights to ensure they are appealing to their target customers, becoming Chartered is a one-stop shop for firms wishing to demonstrate these qualities. Chartered status demonstrates that employees are signed up to and uphold the CII Code of Ethics, and that a firm has made certain commitments to the CII Chartered Ethos, which include ongoing people development, an alignment of ethics and values, and a commitment to a customer-first approach.
Rebecca Aston is professional standards manager of the CII