The FSB, now called the Financial Services Conduct Authority (FSCA), recently proposed amendments to the FAIS General Code of Conduct (GCoC) and the Specific Code of Conduct to align the codes with other legislation, like Treating Customers Fairly (TCF). One proposed amendment focuses on complaints management and prescribes how to deal with client complaints to ensure actions taken are in a client’s best interest.
TCF outcome 6 states that the customers should not face unreasonable post-sale barriers to change a product, switch a provider, submit a claim or lodge a complaint. The proposed amendments define ‘complaint’ as an expression of dissatisfaction by a person to a provider, relating to the provider’s financial product or service provided.
- a provider, or its service rendered, has failed to comply with the agreement, a law or code to which the provider is bound,
- a provider’s wilful or negligent action has caused a person harm or inconvenience or
- a provider has treated a person unfairly.
The proposed amendments introduce nine complaints categories, but FSPs are encouraged to consider additional categories relevant to their own business.
Considering the above, you will need systems in place to manage complaints and ensure clients are treated fairly. The proposed amendments provide guidelines to do this, and require FSPs to implement a Complaints Management Framework to ensure complaints are handled fairly.
Some of the guidelines are:
- ensure the complaints process does not impose unreasonable barriers on complainants.
- document the complaints management process, with clear responsibilities, objectives and principles.
- document all complaints, with the risk identified and action taken.
- keep accurate, efficient and secure records of:
- the number of complaints received and upheld
- escalated complaints and those referred to the Ombud
- the amount paid for compensation or goodwill
- the number of complaints outstanding
- communication with all parties affected, including the Ombud who has jurisdiction over the matter.
- link complaints to the six TCF outcomes or other additional categories.
The Complaints Management Framework must be proportionate to the nature, scale and complexity of your business. It is not a one-size-fits all framework because what is required from a small FSP is not the same as that required from a large corporate. For this reason, it is important that you review your circumstances and personalise the Complaints Management Framework for your business.
As a board of directors would be responsible for the effective management and implementation of the Complaints Management Framework, all complaints information must also be analysed and reported to it.
To ensure your clients, which are your most valuable asset, do not suffer any financial loss, it may be necessary to employ the resources and skills to ensure complaints are effectively monitored and managed. Persons appointed to manage complaints must also be empowered to make decisions.
Contact your Masthead Compliance Officer or Practice Management Consultant for more information on how to implement a Complaints Management Framework.