The second habit of highly successful FSPs under COFI (Part 3) 7 June, 2023

This series of articles is inspired by legendary author, the late Stephen R Covey, whose bestselling book, The seven habits of highly effective people, impacted millions of people around the world. FSPs will do very well to consider the habits highlighted in these articles. 


The first habit


As a quick reminder again, in the first article on the essential habits of highly successful FSPs under COFI, I highlighted the importance of defining reality and to be proactive. The reality is that the Conduct of Financial Institutions Act (COFI) is upon us, and it will impact your business. Best be proactive and start preparing for the next wave of regulatory reform.


The second habit – Seek first to understand, then to be understood 


In the previous articles (Parts 1 and 2) I highlighted that it will be necessary to reassess, and stress-test your business and your client engagement process before conducting business under the new Act. I also highlighted the importance of seeking first to truly understand the fundamentals of COFI before expressing an uninformed opinion and potentially leading your team in the wrong direction. 


In the previous two articles I mentioned the significance of understanding the purpose or objective of the Act and that COFI does not stand on its own. It must be read with the Financial Sector Regulation Act as the FSR Act created the regulatory foundation for COFI to exist. These articles are available in the Member Resources for those who missed it.


The third aspect that FSPs should be aware of is that the principles of Treating Customers Fairly (TCF) will be incorporated into the COFI Act.


As recorded on the FSCA website, Treating Customers Fairly (TCF) is an outcomes based regulatory and supervisory approach designed to ensure that regulated financial institutions deliver specific, clearly set out fairness outcomes for financial customers. Regulated entities are expected to demonstrate that they deliver the following six TCF Outcomes to their customers throughout the product life cycle, from product design and promotion, through advice and servicing, to complaints and claims handling:


– Customers can be confident they are dealing with firms where TCF is central to the corporate culture;

– Products & 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 point of sale;

– Where advice is given, it is suitable and takes account of customer circumstance;

– Products perform as firms have led customers to expect, and service is of an acceptable standard and as they have been led to expect; and

– Customers do not face unreasonable post-sale barriers imposed by firms to change products, switch providers, submit a claim or make a complaint.