When a client calls with concerns about the advice they have received should it be treated as a formal complaint?
That was one of the key questions posed during a Financial Advice NZ webinar last week that included Karen Stevens, Insurance & Financial Services Ombudsman, and Susan Taylor, CEO of dispute resolution firm Financial Services Complaints.
Stevens told the online audience that if a client appears to say they are not happy, then they are telling you they have a complaint.
“A complaint doesn’t have to be made to you,” she says. “It can be made to anyone who is engaged in your business. Therefore, you must have a system in place where all your staff who deal with clients recognize what a complaint looks like.
“And then they have to record the complaint and respond in accordance with the new (FMA) regulations.”
Stevens says while some complaints are crystal clear, others may be couched by the client in terms of general unhappiness, and then it is up to the company to proactively ask ‘what would you like us to do for you?’ and establish if the complaints procedure needs to be used.
An internal disputes resolution process is a requirement of licensing, and “…complaints need to be handled in a fair, timely and transparent manner”, says Stevens.
“In addition, good records need to be kept,” she says. “If you don’t do this then it will be a breach of your license.
“This means you need to show your clients how you are going to deal with their complaint and this must be publicly available information – so you need to disclose how people can complain along with information about your independent disputes resolution process.”
Stevens says all clients need to know they have access to a free independent dispute resolution service.
In order to make sure you are meeting your new obligations you need to keep really good records…
Record keeping was also a key topic during the webinar, with Taylor saying poor communication and poor record keeping has been a continual trend in the complaints her organization has received from consumers.
“In order to make sure you are meeting your new obligations you need to keep really good records,” she says. “You need to meet your disclosure requirements, and your communications with clients need to be clear, easy to follow and avoid using jargon in your communications.”
Taylor says record keeping is key and license conditions include a requirement to keep accurate records of financial advice in a form that can be inspected by the FMA and those working in dispute resolution services.
“Records can be kept in any language, but there must be a summary in English, and they must be kept for seven years after they were made,” says Taylor.
“We often find an adviser has given good advice, but falls down on having not documented it properly. And if you can’t document what you have done then that is the point where issues arise.
“Keeping good records protects advisers in the event a complaint is made further down the track.”
Taylor says those working in dispute resolution organizations look for written evidence of what was said or done years earlier, and without it complaints boil down to one person’s word against another.
“Then we have to decide on the balance of probabilities what actually happened,” she says. “We know that keeping records can be a pain, but the regulator has been clear – if advice documentation is not up to scratch then you may be in trouble if a complaint is made, and you may face disciplinary action.”
Taylor recommends that when making notes about client interactions to include some of the client’s own language, to show that you have given thought to tailoring your advice to that particular client.