Canadian Fund Watch

 Client Focused Reforms (CFR) and client complaint handling

Regulators have not provided any direct guidance in this area. However, based on the general principles underlying CFR we believe that the putting clients interest first and resolving conflicts-of-interest in the best interests of clients provisions suggest the following best practices:

Complaint resolution should be considered a material conflict-of-interest requiring definitive Dealer mitigation.

All complaint-related communications should be in plain language including the final response letter

Dealers should assist complainants in articulating their complaints when needed
Dealers should help complainants understand the rules and regulations applicable to the subject matter of their complaint

Dealers should effect a sanity check on recorded KYC information,  objectives, risk profile, experience and consistency

Dealers should clarity what  will happen at each stage, how long each stage should take and keep the complainant informed of progress.
If the Dealer identifies other issues in the investigation of the client complaint, such issues should be investigated and appropriately remediated for the client

If the Dealer identifies an error or wrongdoing, it should take action or offer compensation that places the consumer in the  position they would have been had the error or wrongdoing not taken place

Dealers should provide complainants an opportunity to present information

The loss calculation should use the Opportunity  cost methodology

The Dealer should offer compensation/remediation  for non-financial losses

The final response letter should be provided within 90 calendar days including all internal steps
The final response letter should provide sufficient information for the complainant to make an informed decision
The final response letter should delineate the dispute resolution alternatives available
The time for the complainant to accept (or not) the final response letter should be fair and reasonable

Dealers should make it clear that complaint details can be shared with the applicable regulator or police
Dealers should not gag complainants speaking about the complaint or how well it was handled
Release letters, if used, should be fair and reasonable 

Characteristics of a good complaint response letter:

Communicating Reasons for Decisions

A response to a complaint should be presented to the complainant in a style that is clear and informative. Generally speaking, good reasons will: ­

·         clearly describe the complaint and the issues addressed in the complaints process  

·       use plain language and avoid legal/ industry jargon  

·       outline the steps the Dealer took to investigate or otherwise resolve the complaint ­

·         set out the  relevant facts considered in the review of the complaint

·         ­set out any applicable laws regulations, or policies, in simple language, that were relevant to the complaint

·         connect the facts with the relevant laws or policies used to reach a conclusion

·         identify the outcome and any remedies the organization is offering to resolve the person’s  complaint ­

·         provide the contact information for a  representative at the Dealer that the person can contact to discuss the outcome

·        advise the complainant of any review or appeal rights that exist and the ability to complain to OBSI and any other external oversight body with jurisdiction over the complaint/decision  in question ­

·        be translated into a language other than English or French where appropriate

 

Such a letter would provide the information necessary for the complainant to make an informed  decision on whether or not to accept the response.