IFM-itransact fund managers

Treating Customers Fairly

Itransact Fund Managers (RF) (Pty) Ltd (“IFM”) respects the Regulator’s mission to maintain a sound financial investment environment in South Africa and acknowledge its mandate to promote the:

  • fair treatment of consumers of financial services and products
  • financial soundness of financial institutions
  • systematic stability of financial industries
  • integrity of financial markets and institutions

To this end IFM welcomes the TCF initiative and commits itself to align IFM’s organisational culture and business processes in such a way as to ensure that the six outcomes of TCF are at all times achieved.

The six outcomes of treating clients fairly will be achieved by our organisation through ensuring that:

  • our clients are at all times confident that their fair treatment is central to our corporate culture;
  • any products and services marketed and sold by us in the retail market are designed to meet the needs of identified client groups and that any related targeting of our clients are done so in accordance with this standard;
  • our clients are at all times provided with clear information and are kept appropriately informed before, during and after the point of sale;
  • our clients are provided with products that performs as we have led them to expect and that any associated services is also of the standard that we have led them to expec;
  • our clients do not face any unreasonable post-sale barriers should they wish to change their products, switch to another MANCO, submit a claim or submit a complaint about our services.

Outcome 1

Clients are confident that they are dealing with firms where the fair treatment of clients is central to the firm culture.

POLICY STATEMENT

It is our committed objective to ensure that all our clients or potential clients can be confident that they are dealing with a Manager where the fair treatment of clients is central to the corporate culture.

We use our best efforts to ensure that at all times we, our staff members render financial services honestly, fairly, with due skill, care and diligence, and in the interests of clients and the integrity of the financial services industry.

PROCEDURES IMPLEMENTED IN ORDER TO ACHIEVE POLICY OBJECTIVES

LEADERSHIP

  • TCF is a standing item on IFM’s board meeting agenda where IFM’s approach to TCF is analysed and discussed.
  • Senior management has adopted TCF deliverables and have been allocated specific responsibilities in terms thereof. Senior management in all areas of IFM that contribute to the rendering of financial services to clients (whether directly or indirectly), understand their respective roles in delivering TCF outcomes to those clients.
  • Senior management conducts regular reviews of the main business processes with a view to identifying areas that do, or may, require improved TCF deliverables. Explicit allowance has been made to allow for and consider TCF implications and deliverables during the strategic planning process of any new strategy or change in existing strategy.
  • Adherence to the TCF deliverables is monitored as part of our Compliance Monitoring Programme. We ensure on a monthly/ quarterly/ bi-annual basis that accurate, meaningful and timely Management Information has been produced during the period and that senior management acts accordingly. Existing tests within our Compliance Monitoring Programme aid us in demonstrating our level of compliance and adherence to the TCF outcomes. Where there are TCF action points, these will be documented and carried over to a further (minuted) meeting.

DECISION MAKING

  • All requests by IFM’s board for the approval of product and service innovations or project expenditure include due consideration of the possible impact it may have on TCF outcomes.
  • The organisation has established accessible forums or structures through which staff members and management are able to debate TCF related matters and refer any TCF questions or concerns.

GOVERNANCE AND CONTROLS

  • Oversight and monitoring of TCF delivery has been explicitly assigned to the governance and control structures of the organisation tasked with risk management and the compliance function.
  • Procedures have been implemented to ensure formal and regular reporting to the governing body and senior management on the progress in achieving TCF deliverables across all of the organisation’s activities and functional departments.
  • The management of TCF and market conduct risks are formally included in the risk management framework of the organisation and are regularly monitored and supervised by the Compliance Officer.
  • Procedures have been implemented for identifying and reporting (at organisation-wide level) TCF risks or failures to senior management and the governing body.
  • There is ongoing evaluation of whether the organisation’s governance framework as a whole has been effective in achieving TCF outcomes.
  • We have mechanisms in place to monitor and respond to changes in the broader environment such as economic and regulatory developments to enable us to proactively identify TCF related risks.

EMPLOYEE PARTICIPATION

  • All staff members (including senior management) whose roles require delivery of TCF outcomes have been identified.
  • Performance evaluation criteria incorporate TCF objectives and are rigorously applied at all levels.
  • Staff members undergo training on TCF principles and deliverables.
  • Recruitment processes have been revised to ensure staff in relevant positions will have the necessary skills to achieve the outcomes of TCF.
  • All staff members are aware of the requirement to treat clients fairly. This Policy has been circulated to all staff members and staff members are encouraged to make suggestions to our TCF Champion on how the treatment of our clients might be further enhanced.

REWARD

Remuneration is meaningfully linked to the achievement of TCF objectives, at all levels and all reward and recognition processes have been revised in the light of TCF objectives.

  • Employment and service agreements have been amended and updated to permit the imposition of meaningful consequences (such as retraining, re-assignment or disciplinary action, as appropriate) for staff members or management who do not achieve agreed TCF deliverables.

MANAGEMENT INFORMATION (“MI”)

Existing MI measures have been reviewed to determine which are useful for TCF monitoring and new measures have been identified where necessary (See Annexure A).

  • Processes are in place to collate and summarise TCF related MI in such a way as to present a meaningful picture of organisation-wide TCF progress.
  • Processes are in place to analyse and act on MI findings to improve TCF outcomes for our clients.
  • We analyse and act on MI findings to identify staff training needs and to align performance management measures

COMMUNICATION

  • We communicate transparently with our stakeholders (including the Regulator) on our progress in achieving TCF outcomes.
  • We make information regarding our progress in achieving TCF outcomes publicly available.

Outcome 2

Products and services marketed and sold in the retail market are designed to meet the needs of identified client groups and are targeted accordingly.

Our clients can typically be grouped into two broad categories:

  • Moderate sophistication: General client groups falling into the mass market
  • High sophistication: Investment groups who have expertise

Our product approval and product selection processes includes senior management confirmation that a product adequately meets the outcomes of TCF and that any such product will perform as clients are led to expect.

Our product approval and product selection processes also include the careful consideration of the elements listed below:

  • When designing a product or selecting a product to distribute or to administer, we identify the particular client groups for which the product can be considered suitable.
  • We provide our staff members with information and guidance to determine the client group/s in respect of whom the products are best suited.
  • In determining whether our distribution and administration methods are suitable for the product and target market, we take into account all known and foreseeable risks associated with the product.
  • We have measures in place to identify and mitigate risks that a product or service may pose to particular client groups.
  • When approving or selecting any product for distribution:
  • We assess the suitability of any promotional or other material that has been designed for the identified client group
  • We assess the suitability of any related and optional (bundled and “add-on”) products or services for the identified client group
  • Moreover, should any product be selected that includes bundled or “add-on” products or services, we confirm that there are processes in place to ensure the fair treatment of clients or members with regard to such bundled and “add-on” products or services, including ensuring that these products or services are appropriately targeted to the needs of client groups for which they are provided.
  • We have measures in place to evaluate the client groups’ financial understanding of products or services offered or provided to them.
  • We track sales to determine whether products are in fact sold to the identified client groups.
  • We have processes in place to mitigate risks where it becomes apparent that the product or the distribution or the administration method, or any combination of these elements, was not suitable for the identified client group, or that the product has been distributed to inappropriate client target groups.

Outcome 3

Clients are provided with clear information and are kept appropriately informed before, during and after the point of sale.

  • We assess the clarity, appropriateness and fairness of product information provided to clients, whether such information is produced by ourselves or by others and all product related information requires sign-off by senior management.
  • Before any product information is issued, it is carefully tested to ensure that the content will be clear and understandable by the target audience and client group.
  • We have implemented appropriate risk mitigation procedures that are designed to address any inaccurate, unfair or misleading information about our products or services that may be provided to clients by third parties.
  • We have implemented appropriate procedures to ensure that any information we provide regarding any other party’s products or services is accurate, clear, and fair and is not misleading.
  • We have implemented appropriate procedures to ensure that we are able, as far as reasonably possible, to rectify any situation where it becomes apparent that any product information already in circulation (whether produced by IFM or not) is inaccurate, unclear, or unfair or is misleading.
  • We regularly review standardised product information we use (whether produced by IFM or not) to ensure that it remains accurate, clear and appropriate to the applicable client groups.
  • We monitor and act on feedback, complaints and suggestions received from clients, staff members or any other parties that communicate the need for improvement in product information.
  • We have a process in place to ensure relevant and adequate product information is provided to our clients, whether by our own staff members or by other parties, at an appropriate time to enable them to make an informed decision as to whether to enter into the relevant contract.
  • We provide all existing clients with written statements at least once a year that identify any financial products that have been acquired by that client and where such products are still in existence. Such statements provide brief current details (where applicable), of:
    • any ongoing monetary obligations of the client in respect of such products;
    • the main benefits provided by the products;
    • where any product was marketed or positioned as an investment or as having an investment component, the value of the investment and the amount of such value which is accessible to the client; and
    • any ongoing incentives, consideration, commission, fee or brokerage payable to ourselves in respect of such products.
  • We ensure that clients are informed of any recent or pending changes to our products, contractual events or any actions required from them, and that such information is provided in sufficient time to enable any client to reasonably respond to or act on that information.
  • To the extent applicable, we control the accuracy and quality of any once-off or non-standard product information provided by staff members to clients or potential clients.
  • We maintain up-to-date contact details of all our existing clients.
  • We ensure that clients have current and accessible contact points if they need product or service information or need to get in contact with our functional departments for any reason.
  • We have accurate, retrievable, secure records of all product information we have provided to clients and any other material interactions with clients.

Outcome 4

Where clients receive advice, the advice is suitable and takes account of their circumstances

        Not applicable as no advice is given.

Outcome 5

Clients are provided with products that perform as the firm has led them to expect, and the associated service is of an acceptable standard and as they have been led to expect 

  • Processes are in place to mitigate the risk that products and services are unable to satisfy the reasonable expectations of clients.
  • We analyse the product retention / portfolio switching / early termination behaviour of our clients to identify the possible risk that products or services are not meeting expectations.
  • Processes are in place to alert clients to the risks resultant from their actions (such as early termination of a product, non-payment of contributions, investment portfolio switches, and benefit reductions) in reasonable time for them to respond to or act on the information.
  • Processes are in place to alert clients to the risks of non-action on their part, such as a failure to review insurance cover needs, investment goals, risk profiles and beneficiary nominations.
  • We have clear service standards in place for client service processes and communicate these to our clients.
  • We research and test our service standards to determine whether they are in line with client expectations.
  • We monitor and act on feedback, complaints and suggestions received from clients, intermediaries and staff members that identify the need for improvements in our services or service standards.
  • Where it becomes apparent that products are not performing or are unlikely to perform as clients have been led to expect, we have implemented processes to mitigate the risks to our clients.
  • We have adopted “Management Information” on client expectations.
  • Processes are in place to protect the confidentiality of all client information.
  • We have clear agreements in place regarding the division of responsibilities between the various parties to ensure the fair treatment of clients.
  • We conduct an appropriate level of due diligence on any such third party, before dealing with them, to satisfy ourselves that TCF outcomes are adhered to and that the products and / or service levels, as the case may be, are likely to be as clients (and we) have been led to expect.
  • We regularly monitor the third party’s client treatment standards, including how the third party meets client expectations.
  • Processes are in place to mitigate the risks to our clients where it becomes apparent that a third party’s products are not in fact performing as clients (and we) have been led to expect by that third party or where it becomes apparent that service from the third party is not of an acceptable or agreed upon standard.
  • We have full and unrestricted access to information held by the third party in relation to our clients’ Management Information.

Outcome 6

Clients do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint

CHANGING PRODUCTS 

  • We inform our clients (in good time, not only on request) of the types of permissible changes they may make to their products if their individual needs or circumstances change and of any important limitations on their ability to access funds or to make amendments to any product.
  • When we become aware of any changes to a client’s needs or circumstances (including affordability difficulties), we inform such client of possible product changes that are available to them in order to meet their changed requirements.
  • We have clear service standards in place for processing product changes (including instances where the request needs to be referred to another party for processing) and communicate these standards to our clients.
  • Where a request for a product change is declined by any party in the value chain, we provide the client with clear reasons for the decision.
  • When we receive a request to change a product (whether directly or through another party) we inform the client of any potential risks associated with the change, in reasonable time for them to respond to or act on the information.

SWITCHING PROVIDERS 

  • We have clear service standards in place for processing switches to other providers and communicate these to our clients.
  • When we receive a request to switch providers (whether directly or through another party) we inform the client of any potential risks associated with the switch.

COMPLAINTS HANDLING

  • We test our complaints process to ensure it is accessible and appropriate to our client group/s.
  • We have a robust complaints management, record keeping and root cause analysis process.
  • We inform clients (before complaint stage) of the process that must be followed in order to submit a complaint and of the various options available for further recourse if the client is dissatisfied with the outcome of the complaint.
  • We benchmark our complaints data (for example, complaint volumes, resolution rates, referrals to Ombud schemes) against competitors.
  • Once a complaint has been received, whether we are dealing with the complaint ourselves or where we have referred the complaint to another party, we keep clients informed of its progress (including the contact details of the person responsible for processing the complaint)
  • When responding to a complaint, we provide clear reasons for our response (including where the response is favourable to the client), with supporting evidence where relevant.
  • Where a request for redress is declined, wholly or partially, we inform the client of the steps that may be followed in order to have the decision reviewed.
  • We have clear service standards in place for processing complaints and we communicate such standards to our clients.
  • We have specific staff training in place for complaints handling.
  • Complaints processes are structured in such a way as to ensure that there are no conflicts of interest and that all decisions are based on objective facts and criteria.
  • Complaints processes are structured in such a way as to ensure that complaints of a similar nature have a similar outcome.
  • Follow-up processes are in place to determine the client satisfaction levels of complaints that have been finalised.
  • Processes are in place to ensure consistency in complaints handling. We have a policy in place for fair compensation of clients who have been financially prejudiced by unfair treatment, which is not limited only to those clients who complain.
  • We analyse complaints to identify any risks of mis-selling.
  • We consider the nature of complaints received and the complaints handling performance history of different product suppliers when deciding on whether or not to enter into a business relationship with a particular product supplier
  • We consider the nature of complaints received and the complaints handling performance history of different product suppliers when recommending a particular product supplier or financial product to our clients.