Treating Customers Fairly (TCF) is an outcome-based regulatory and supervisory approach designed to ensure that fairness outcomes for financial services consumers are delivered by authorized financial services providers.
All FSPs (Financial Services Providers) are required to incorporate 6 TCF outcomes into their business operations to their customers, namely:
- Customers are confident they are dealing with firms where TCF is central to the corporate culture.
- Products and services marketed and sold in the retail market are designed to meet the needs of identified customer groups and are targeted accordingly.
- Customers are provided with clear information and kept appropriately informed before, during and after the time of contracting.
- Where customers receive advice, it is suitable and takes account of customer circumstances.
- Customers are provided with products that perform as firms have led customers to expect; associated service is of an acceptable standard and what they have been led to expect
- Customers do not face unreasonable post-sale barriers imposed to change product, switch provider, submit a claim or make a complaint.
How does it affect a customer body corporate?
FSPs (Financial Services Providers) have to comply with the TCF outcomes – some of which are already included in existing legislation such as the FAIS Act General Code of Conduct. The code already requires financial service providers to provide services honestly, fairly, with due skill, care and diligence and in the interest of the client and the integrity of the financial services industry which correspond with the TCF outcomes.
For example, Addsure’s LOA (Letter of Advice) meets the Record of Advice requirements in the code of conduct which is aligned to the TCF framework.
The main aim of TCF is to ensure that fair treatment of customers is embedded within the culture of financial services providers.
As the customer body corporate, the trustees need to ensure that the body corporate receives the advice aligned with the code of conduct and in a TCF-orientated manner. We suggest that the minutes of the trustees meeting where the annual policy renewal is discussed and decided upon, is filed with specific reference to the LOA (Letter of Advice) or filed together with the minutes itself.
It is important for trustees to ensure that when they receive advice – at least annually on policy renewal – the body corporate is provided with a written copy of the advice. In terms of the code of conduct and TCF culture, the advice should meet certain criteria, e.g. reflect the basis on which the advice was given including a summary of the information and material, the financial products that were considered and the financial products selected with explanation why the selected is being recommended.
Author: Mike Addison
Contact Addsure – The Leaders in Sectional Title Insurance – to get fit and proper advice from advisors who understand sectional title. Contact us in Johannesburg on (011) 704-3858; in Durban on (031) 459-1795 and in Cape Town on (021) 551-5069