When a client complaint can be good for your business

BDO’s Tim Kirk outlines six steps to dealing with client gripes (and keeping the FSA at bay)

Offering a superior customer experience is increasingly an area where advisers, and other financial services firms, are seeking competitive advantage.  Consumer protection also remains a key priority for the FSA.

However, in the view of the regulator and the Financial Ombudsman Service, too many firms are failing to respond properly to customers’ complaints. 

Providing a good customer experience after a firm makes a mistake (real or perceived), and meeting the requirements of regulators, means: making it easy for customers to complain; investigating all complaints fully and within a reasonable time; fixing or compensating for any loss or detriment suffered by the customer; and learning from the complaint to ensure other customers are not affected by similar issues.

Recent high profile FSA enforcement cases have illustrated that, where firms do not take effective and proactive corrective action based on complaints management information and root cause analysis, they can expect a tough time from the regulator.

With recent development and clarification of the dispute resolution rules, the FSA is telling firms that punishment will result unless customers’ complaints are dealt with fairly.

Firms should look to embed a framework encompassing the virtuous circle of listening to customer feedback, root-cause analysis and improvement action which the FSA expects firms to be following.

The FSA now expects to see evidence of this virtuous circle in action (including real improvement of the complaints process as a result).

Below is my six step guide to achieving just that: