FSPs will need to establish a complaints management framework in their business following the FSCA’s (previously FSB) proposed changes to the FAIS General Code of Conduct (GCoC) in November 2017.
The framework should include a complaints resolution process. This systematic method is used by businesses to receive, record and respond to customer complaints. It ensures that responses to complaints are efficient and effective, and that the business learns from the complaints.
A complaints resolution process should be tailored to each FSP, and management in the FSP should consider what is appropriate for their particular FSP. However, a typical complaints resolution process should include the following key steps:
Components of the complaints resolution process
Two components of the complaints resolution process are a complaints handling policy and a complaints register.
A complaints handling policy should provide you and your clients with a clear and considered process to manage and resolve client complaints. It should explain the steps you would like customers to take when making complaints. It should identify the steps you will take in discussing, considering, addressing and resolving complaints and indicate some of the solutions you offer to resolve complaints. It should also inform your customers about ongoing improvements to your business.
Your complaints handling policy should be seen as an opportunity to describe to your clients your positive attitude to discussion and continuous improvement. It should tell clients how much you value their feedback and state your commitment to resolve complaints quickly, fairly, efficiently and courteously.
Developing your own policy will help you operate with confidence when client complaints arise.
A complaints register will show how your FSP handled customer complaints and the type of complaints received. It should at least include the following fields:
- The priority of the claim
- Complaint reference number
- Customer name and surname
- Person dealing with the complaint
- Date the complaint was received
- Date the complaint was acknowledged
- Product type
- Complaint category – does the complaint relate to:
- the design of a financial product, financial service or related service, including the fees, premiums or other charges related to that financial product or financial service;
- information provided to the client
- advice given to the client
- performance of the financial product or financial service
- the servicing of clients, including complaints relating to premium or investment contribution collection or the lapse of a financial product;
- accessibility of a financial product, changes or switches, including complaints relating to redemptions of investments
- the handling of complaints
- insurance risk claims, including non-payment of claims; and
- anything else?
- TCF outcome to be addressed
- Brief detail of the complaint
- Whether the complaint was resolved or not
- If resolved, the resolution date
- Action that was taken to resolve the complaint
- What proof was received of the customer’s satisfaction
- Alternative resolution offered, if applicable
- Number of previous complaints received from this client, if applicable
- If this complaint was escalated to the Ombud.
The proposed amendments to the GCoC aim to ensure that an FSP’s complaint process is straightforward, transparent and fair to consumers. It contains several new definitions, and it is ideal to familiarise yourself with them.
Receiving negative feedback may not feel like the best thing in the world but, approaching it with an open mind, one can learn from it. Getting feedback is one of the essential elements of good communication and a critical element of best practice performance management, so let the complaints management framework work for you.
Contact your Masthead compliance officer or practice management consultant for more info on how to implement a complaints management framework in your FSP.