Chapter 7: The South African regulatory environment

Question 1

The TCF fairness outcomes, positioned from the perspective of the customer, are the following: (6)

Answer 1

1. Customers are confident that they are dealing with firms where the fair treatment of customers is central to the firm’s culture.
2. Products and services marketed and sold in the retail market are designed to meet the needs of identified customer groups and are targeted accordingly.
3. Customers are given clear information and are kept appropriately informed before, during and after the time of contracting.
4. Where customers receive advice, the advice is suitable and takes account of their circumstances.
5. Customers are provided with products that perform as firms have led them to expect, and the associated service is both of an acceptable standard and what they have been led to expect.
6. Customers do not face unreasonable post-sale barriers to change products, switch provider, submit a claim, or make a complaint.

Question 2

Firms will be required to demonstrate that they are consistently treating customers fairly throughout the stages of the product life cycle to which they contribute, specifically: (6)

Answer 2

1. Product and service design: products and services - and the distribution strategies chosen to bring them to market - are designed and developed for specific target markets, based on a clear understanding of the likely needs and financial capability of each customer group.
2. Promotion and marketing: products are marketed to specific target groups through clear and fair communication that are not misleading and are appropriate to the target group.
3. Advice: firms need to ensure that, where advice is provided, advisers are fully equipped to provide advice that is suitable to the needs of the customer concerned, balancing the commercial objective of increasing sales with the objectives of TCF, and avoiding conflicts of interest.
4. Point-of-sale: firms need to provide clear and fair information to enable customers to make informed decisions about transacting with the firm, its products and services.
5. After point-of-sale: Firms need to provide customers with ongoing relevant information to enable them to monitor whether the product or service continues to meet their needs and expectations, and provide acceptable levels of service for post-sale transactions or enquiries.
6. Complaints and claims handling: firms need to honour representations, assurances and promises that lead to legitimate customer expectations. Legitimate expectations must not be frustrated by unreasonable post-sale barriers.