Amendments to the General Code of Conduct (GCoC) highlight again the importance of Treating Customers Fairly (TCF) and dealing efficiently with client complaints. With some of the amendments having taken effect on 26 December 2020, it’s important to revisit client service and client satisfaction in your FSP.
Client satisfaction plays an essential role in the financial services industry, but how do you prove client satisfaction? One way is to look at client dissatisfaction or client complaints. Fewer complaints could indicate satisfaction. However, how your FSP handles client complaints could better indicate whether clients are satisfied or not.
The Complaints Management Framework seeks to ensure consistent delivery of high-quality responses to complaints and FSP accountability. It aims to align the complaints process with the overall regulatory requirements and TCF outcomes, as well as industry ‘best business practice.’
It also aims to ensure all complaints are handled fairly and consistently and are resolved to the complainant’s satisfaction. This would satisfy the TCF principles and ensure complainants face no unreasonable post-sale barriers.
Having a Complaints Management Framework can thus evidence that the TCF outcomes are embedded in your business. It can also prove you have implemented and are monitoring the outcomes.
The amendments to the GCOC, published on 26 June 2020, have significantly changed the requirements of the Complaints Management Framework. The amendments include new definitions and requirements added to the framework. While some changes came into effect in December 2020, others come into effect on 26 June 2021.
Establishing a Complaints Management Framework
Your FSP is required to establish, maintain and operate an adequate and effective Complaints Management Framework that is proportionate to the complexity of your business. The effort and complexity of the framework will therefore not be the same for small and large FSPs.
The framework should include a process that demonstrates how your business receives, records and responds to customer complaints. A complaints register, which follows the Complaints Management Framework, should show how your business handles customer complaints and the types of complaints received. It should ensure responses to complaints are efficient and effective, and that your business learns from the complaints received. It should also indicate whether clients are satisfied or not with how their complaints were dealt with.
Other requirements your framework needs to address include:
- Objectives, key principles and the proper allocation of responsibilities to deal with complaints.
- Documented procedures to appropriately manage and categorise complaints, with expected timeframes.
- Procedures for the escalation, decision-making, monitoring, oversight and review processes.
- Complaint record keeping, monitoring and analysis of complaints.
- Reporting of complaints to executive management, the board of directors and any relevant committee of the board.
- Appropriate communication with complainants.
- Appropriate engagement between the provider and relevant Ombud.
- Meeting the requirements for reporting as may be required by the FSCA.
- Regular monitoring of the Complaints Management Framework.
The GCoC amendments also provide comprehensive requirements regarding communicating with complainants and adhering to the TCF principles.
Resolution of complaints
Although complaints are unique to each business, there is nothing unique about the stress and anxiety they cause. This becomes clear if an unresolved complaint is escalated to the FAIS Ombud and results in a finding or determination against the FSP.
An effective Complaints Management Framework is a great tool to help your business effectively manage clients’ issues, concerns and complaints. Effective resolution can lead to more satisfied clients. It also helps your business to mitigate risks, identify trends and manage clients’ experiences or satisfaction when complaints arise.
The process in your framework will also reflect how you embed TCF in your business. It will help you create a future-fit business, where management and staff lead by example. This is where customer service begins.
John Wooden, one of the greatest US basketball coaches, said: “Consider the rights of others before your own feelings, and the feelings of others before your own rights.” As you establish an effective complaints process in your business, or revisit the one you have, think about the importance of clients to your business. Also consider how much your reputation is worth to you.