Compliance is a process and a result, not just a department. Here are some key tips to help you achieve this result.
Providing proper advice stems from true understanding
When it comes to selling products like short-term insurance, it can quickly become complicated if any terms and conditions are neglected in the process. It is really important for an adviser to know a product inside and out before selling it on. This may seem obvious, but time and time again, compliance issues like this creep up in the short-term space.
The ability to provide appropriate advice is dependent on an adviser understanding a product and how it will address his or her client’s needs. Specialised products, where the terms and conditions are complex, require in-depth training and understanding. Even advisers who think they know a product could stand to refresh their knowledge from time to time.
Insurers could use their claims data (specifically repudiated claims) to inform their product specific training and to identify advisers who need further training, which will deter errors as well. The policy contract (wording) is a legal document, and you can’t use plain enough language when advising on it. Advisers should be well positioned to explain the wording and the terms and conditions to a client, confident in the accuracy of the advice they are providing.
To echo the above and in line with TCF Outcome 4, providing suitable advice to clients is crucial to the success of an adviser and his ability to run a compliant business. You need to know how to evidence this, which is best done through being on top of product specifics. You should never sell on something you are unsure about.
From POPI to COFI
Being compliant now also extends to adhering to – and evidencing adherence – to the POPI Act, by safeguarding not only personal and special personal information, but sensitive information and data too. The COFI Bill requires of advisers to segment their service offering and value proposition to clients and insurers to ensure proper market conduct and fair outcomes for clients.
Get Fit and Proper
Fit and Proper requirements are complex and ever-changing. Getting it right is a fundamental requirement, getting it wrong is disastrous, but in the middle of right and wrong, there are several shades of grey and FSP’s should have a trusted source of advice and guidance to ensure compliance with these requirements.
Compliance is practical and needs to be consistent to be successful. It’s not just a tick box process to stay on top of your compliance obligations either. Working with a trusted, external compliance partner can make a big difference allowing for time to focus on business growth and other areas where compliance could take up time. Regulatory requirements will never cease (in fact they may increase), so implementing the correct controls are crucial and will guarantee compliance.
Article by Elzabe Botha, Director at Compli-Serve Gauteng