TCF principles: the six Treating Customers Fairly outcomes, applied to a brokerage

Contents

1. Where TCF comes from
2. The six TCF outcomes
3. What a supervisor looks at
4. TCF in a WhatsApp conversation
5. A short TCF self-assessment for a brokerage
6. Frequently asked questions

Treating Customers Fairly (TCF) is the outcomes-based approach the South African conduct regulator uses to judge whether financial firms treat customers fairly. It is built around six outcomes: a culture where fairness is central, products designed for identified customer groups, clear information before, during and after the sale, suitable advice, products and service that perform as customers were led to expect, and no unreasonable barriers after the sale to change a product, switch provider, claim or complain. For a brokerage, TCF is less a separate rulebook than a lens: the FSCA reads your disclosures, advice records, renewals, claims support and complaints through these six outcomes.

Where TCF comes from

The Financial Services Board, the predecessor of the Financial Sector Conduct Authority (FSCA), published its TCF discussion document in March 2010 and its TCF roadmap in March 2011, and confirmed TCF as the main framework for its mandate to promote the fair treatment of financial services customers under the Twin Peaks model. In the FSB's words, TCF "is an outcomes based regulatory approach that seeks to ensure that specific, clearly articulated fairness outcomes for financial services consumers are delivered by financial institutions". There was no formal start date: firms were expected to apply the principles as they were communicated.

For a broker, TCF sits on top of rules that already bind it. The FAIS General Code of Conduct requires a provider to render financial services honestly, fairly, with due skill, care and diligence, and in the interests of clients, and to give information in plain language. Our guide to the FAIS Act covers that legal frame; the Policyholder Protection Rules carry fairness duties into the insurance contracts themselves.

The six TCF outcomes

Outcome	What the regulator expects	What it means in a brokerage
1. Culture and governance	Customers can be confident they deal with firms where TCF is central to the corporate culture	Fairness shows up in incentives, management information and how staff are supervised, not only in a policy document
2. Product design and targeting	Products and services are designed to meet the needs of identified customer groups and targeted accordingly	You know which clients each product you place is meant for, and campaigns go to those clients only
3. Clear information	Customers get clear information and are kept appropriately informed before, during and after the point of sale	Disclosures, premium changes, renewal terms and exclusions are explained in plain language, in writing
4. Suitable advice	Where advice is given, it is suitable and takes account of customer circumstances	A needs analysis and a record of advice exist for every recommendation, including those made in chat
5. Performance and service	Products perform as firms led customers to expect, and service is of an acceptable standard	Response times, claims support and renewal handling match what the client was told
6. No unreasonable post-sale barriers	Customers do not face unreasonable barriers to change product, switch provider, submit a claim or complain	Cancelling, claiming and complaining are as easy as buying, and every complaint is logged

The FSB stressed that these outcomes must be delivered "throughout the product life cycle, from product design and promotion, through advice and servicing, to complaints and claims handling". That last point matters for brokers: most TCF failures in intermediation happen after the sale.

What a supervisor looks at

TCF has no checklist of its own, which is exactly why firms find it hard. In practice, evidence of fair outcomes comes from records you already keep for FAIS, read differently:

• Outcome 1: management information that tracks complaints, lapses and cancellations by representative and product, and what management did about it.
• Outcome 2: segment definitions for each campaign, so that a funeral or credit life offer is not pushed to clients it does not suit.
• Outcome 3: the actual messages sent to clients about premium increases, renewals and exclusions, with dates.
• Outcome 4: needs analyses and records of advice; see our guide to the record of advice on WhatsApp.
• Outcome 5: response times on service requests and claims, measured rather than estimated.
• Outcome 6: the complaints log, how long each complaint took and how the client was told about escalation to an ombud.

An FSB baseline study published in 2013 and presented to collective investment managers in 2014 found that, across sectors, Outcome 1 (culture and governance) scored lowest in firms' self-assessments. Culture is the outcome firms find hardest to evidence, because it lives in decisions rather than documents.

TCF in a WhatsApp conversation

Chat is where several outcomes are tested at once, because it is fast, informal and often unsupervised. Three situations come up in every brokerage:

A premium increase at renewal (Outcome 3). The client should hear about it before the debit, in plain words, with what changed and what they can do:

Hi {first name}, your {policy} renews on {date}. The monthly premium changes from {old amount} to {new amount} because {reason given by the insurer}. If you would like to review your cover or compare options before then, reply here and {adviser} will call you.

A client wants to cancel (Outcome 6). Retention is legitimate; making cancellation hard is not. Acknowledge, explain the consequence, give the route:

Thanks {first name}, noted. To cancel we need your written instruction, and this message counts. Please note that cover stops on {date}. If anything changes your mind before then, we are here.

A complaint arrives in a chat (Outcome 6). It should be logged as a complaint the moment it is recognised, not left as a conversation. Our guide to claim complaints and the right ombud covers the records to keep.

Lapses after a failed debit order are an Outcome 5 and 6 issue too: a client who loses cover because nobody told them a debit bounced has not been treated fairly, even if every document was in order. Our lapse risk playbook sets out the follow-up.

A short TCF self-assessment for a brokerage

1. Can you show, per representative, complaints, cancellations and lapses for the last 12 months?
2. Does each campaign have a written target group, and is it sent only to that group?
3. Are premium changes communicated before the effective date, in writing, in plain language?
4. Is there a record of advice for recommendations made by phone or chat, not only in meetings?
5. Do you measure how long clients wait for a reply on service requests and claims?
6. Is cancelling or complaining possible through the same channel the client uses to buy?

Each "no" points to an outcome you cannot evidence today. Tools help with the evidence, not with the judgement: in ORIS, conversations sit on the customer record in a shared inbox, campaigns go to defined segments from Meta-approved templates, and opt-outs and consent are recorded, while what is fair remains the brokerage's call.

Frequently asked questions

What are the six TCF outcomes?

Culture and governance; products designed for identified customer groups; clear information before, during and after the sale; suitable advice; products and service that perform as customers were led to expect; and no unreasonable post-sale barriers to change product, switch provider, claim or complain.

Is TCF a law in South Africa?

TCF is a regulatory approach rather than a single statute. Its outcomes are embedded in conduct rules that are binding, such as the FAIS General Code of Conduct and the Policyholder Protection Rules, and the FSCA uses them to assess how firms treat customers.

Does TCF apply to small brokerages?

Yes. TCF applies to regulated financial institutions whatever their size. A small brokerage will evidence it with simpler records, but the same six outcomes are the measure.

Which TCF outcome do firms find hardest?

In the FSB's baseline study reported in 2014, Outcome 1, culture and governance, scored lowest across sectors. It is hard to evidence because it shows in management decisions, incentives and supervision rather than in documents.