“Forever in debt to your priceless advice
I got a new complaint”
— Nirvana, “Heart shaped box”
Manage the complaint, before it manages you.
As a business owner, or Compliance Manager, dealing with client complaints may be an inevitable part of your job.
No matter how hard you try to provide high-quality advice and services, there will always be someone who is unhappy; unhappy about the service they received, unhappy about the perceived lack of service, unhappy with market volatility or unhappy about the cost of your advice.
While complaints can be frustrating and time-consuming , it’s important to remember that they present your business with an opportunity to improve processes and, in some cases, the chance to strengthen your relationship with your client. In fact, research shows that ‘83% of clients feel more loyal to brands that respond and resolve their complaints’.
You know that RG 271 Internal Dispute Resolution (IDR) came into effect 5 October 2021 but you may have forgotten that Licensees’ mandatory IDR reporting to ASIC commences on 31 August 2023. The Cliff Notes version of the obligation is that, every six months, you’ll need to submit your IDR data to ASIC. The kicker is that ASIC require some information that’s not commonly recorded and want the data in the format they’ve prescribed. Point your geeks in the direction of ASIC’s data dictionary and their API.
With all this coming at us head on, we thought it was timely to talk about effective strategies for managing complaints.
1. Listen actively and attentively to the client’s complaint.
When a client brings a complaint to your attention, the first thing you should is acknowledge it.
Listen carefully to what they have to say. This means giving them your full attention, showing them you’re genuinely interested in understanding their perspective.
You can gain valuable insights in this conversation, you’re hearing the client’s perspective into what has gone wrong and most importantly, why they’re unhappy. This conversation will help you to identify the root cause of the problem and assist you to find a resolution that addresses their concerns.
Avoid interrupting the client or jumping to unnecessary conclusions. Let them speak, and try to resist the temptation to defend your business or point the finger at someone else. [We all know it’s Sam’s fault]
2. Apologise for the inconvenience.
Once you have listened to their complaint and tried to understand their perspective, the next step is to apologise for the inconvenience they’ve experienced.
This is an important step, it shows the client that you take their concerns seriously but, more importantly, is often the step that prevents further escalation.
If they’re unhappy with the service they received, your apology might sound something like “I’m sorry that we disappointed you. We always try to provide our clients with the best possible experience.”
Please don’t make excuses or shifting blame; let the client speak, listen, reassure them that you’re going to look into the matter and make their concern your priority. Then, do that.
3. Take ownership and seek to resolve the matter within 5 days.
The next step is to take ownership of the problem and try to find a resolution.
This means (where possible) you should commit to resolving the complaint and making things right for the client quickly (and, for simple matters, within 5 days).
It’s important to be proactive in your efforts to find a resolution.
Is the client seeking a specific outcome?
What is the fairest outcome?
Is your proposed outcome fair, based on the circumstances, and reasonable, based on RG 277 Consumer Remediation?
If you’re not sure, it probably isn’t. It’s too important to get wrong so speak to your Compliance Manager or Compliance Consultant before responding to the complainant.
Depending on the complaint, other circumstances and the likely resolution, there may be some instances where your PI Insurer needs to be informed. If this needs to be done, speak to either your Compliance Manager or Responsible Manager when you receive a complaint; as stressful as that prospect may be, their guidance will be invaluable.
4. Keep the client informed.
Where you can’t close the complaint within 5 days, your Licensee has an Internal Dispute Resolution (IDR) process that needs to be followed.
Let me assure you that you’re more likely to be able to resolve a complaint, even a contentious complaint, if you keep the client informed about the progress of their complaint. This means that you, or a more appropriate person, should provide regular updates on the status.
There are several ways you can keep the client informed about the progress, depending on the nature of the complaint and the preferences of the client. For example, you might:
- Send regular updates via your clients preferred method of communication i.e. phone, email or text message.
- Provide the client with your Complaint Manager’s name, phone number and email address, so your client knows who to contact, and importantly who they will hear from to resolve the matter.
- If your client prefers meetings, ensure your Complaint Manager is aware of this, they can offer a check-in meeting to provide the client with an update or to gather further information to resolve the matter.
Overall, the key is to be transparent and responsive, providing your client with the information and support they may require to feel confident that their complaint is being handled effectively. As a general principle, your internal IDR process should be clear, accessible and adaptable to your clients individual needs and preferences.
5. Use the complaint as a learning opportunity.
One of the biggest benefits of managing client complaints effectively is that it can help you to improve your business processes to prevent similar issues from occurring in the future.
By listening carefully to feedback, and using it to identify areas for improvement, you can identify necessary changes to your internal processes that will ultimately enhance the client experience.
For example, if a client complains about a misunderstanding of fees disclosed within your Statement of Advice, you might realise that you need to improve your fee disclosure section of your Statement of Advice. The complaint may also highlight the need for more support and training to ensure this is not a reoccurring complaint.
By taking a proactive approach to improving your business processes based on client feedback, you can not only resolve the current complaint, but also prevent similar issues from occurring in the future.
6. Thank the client for bringing their complaint to your attention.
“Your most unhappy clients are your greatest source of learning.”
— Bill Gates, Microsoft
After working on the complaint for days (weeks in some instances, but no more than 30 days), you may be thinking, why do I want to thank the client? Because without that complaint you would not know what business process to improve, and that improvement should lead to a greater advice experience for your next client.
According to Salesforce State of the Connected Customer 5th edition– 80% of customers will forgive a company for its mistake after receiving excellent service.
While self-service is ideal for simpler cases, empathetic and knowledgeable agents remain the beating heart of customer service. Their attentive care adds value by proving that customers’ concerns matter and are worth the investment to resolve.
96% of customers say excellent customer service builds trust.
The rewards for getting customer service right can be substantial.
Overwhelmingly, positive support experiences make customers more likely to re-purchase. Additionally, over four-fifths of customers have gone further by recommending a company to others based on a great support experience. With word-of-mouth such a popular method of learning about new brands, products, and services, referrals are a powerful gift. ~ R.R. Donnelley (Un)Expected Report, July 2021
Managing client complaints effectively is not only a licence obligation, it’s an essential part of running a successful advice business. While complaints are a great source of learning, they also require time, resources and experience, so if you’re lacking in any way understand that Assured Support can provide expert complaint handling services.
You also need to appreciate that even if you follow my recommendations, you may not always be able to resolve a client complaint to the clients satisfaction; they may, as is their right, escalate the complaint to AFCA and AFCA will review the matter using all available documents and information (including your response to the complaint).
Your IDR processes will be put to the test regularly, so it’s important to ensure all your staff receive regular training on complaints handling. They should be able to recognise when a complaint is made, report this complaint in a timely manner to either the Compliance Manager or Responsible Manager who will follow your complaints handling process inline with RG 271.
If you would like your IDR process reviewed or would like to understand how OpenAFSL can assist with your complaint reporting obligation, please contact us at email@example.com.