Leon Greyling, Director at ICTS Legal Services
Treating Customers Fairly (TCF) has become a foundational element of South Africa’s financial regulation. Introduced by the Financial Services Board (now the Financial Sector Conduct Authority or FSCA) in 2011 and rolled out progressively from 2014, TCF is an outcomes-based supervisory approach designed to protect customers. It requires regulated entities to deliver specific fairness outcomes across the entire product lifecycle – from design and marketing to servicing, claims, and complaints.
As the Conduct of Financial Institutions (COFI) Bill advances through Parliament following Cabinet approval and tabling in the National Assembly in April 2026, TCF principles will gain statutory force. The Bill establishes a single, principles-based, activity-based, and outcomes-focused framework for market conduct regulation. It applies uniformly to all financial institutions, including banks, insurers, and retirement funds, replacing fragmented sector-specific rules with a cohesive duty of fair treatment. For retirement fund boards and their service providers, COFI marks a significant shift: funds will require a conduct licence in addition to registration under the (renamed) Retirement Funds Act, while service providers such as administrators will need activity-specific licensing. Employers will become “supervised entities,” strengthening enforcement around the likes of contribution payments,and active oversight of participation in umbrella funds.
At the heart of TCF lie six clear customer outcomes that financial institutions must demonstrably deliver:
1. Culture and governance: Customers can be confident they are dealing with firms where TCF is central to the corporate culture. Leadership must embed fairness in strategy, policies, and decision-making.
2. Product suitability: Products and services are designed to meet the needs of identified customer groups and are targeted appropriately, avoiding mis-selling to vulnerable segments.
3. Clear information: Customers receive clear, timely information before, during, and after the point of sale, enabling informed decisions.
4. Suitable advice: Where advice is provided, it is appropriate and considers the customer’s personal circumstances.
5. Performance and service: Products perform as promised, and associated service meets reasonable expectations.
6. No unreasonable post-sale barriers: Customers face no undue obstacles when changing products, switching providers, submitting claims, or lodging complaints.
Under COFI, these outcomes will no longer be aspirational guidance but enforceable standards backed by licensing conditions, conduct rules, and supervisory powers. Financial institutions must prove – not merely claim – compliance through evidence of systems, monitoring, and outcomes data.
For general financial institutions, practical application begins with a culture change. Boards and senior management must integrate TCF into governance frameworks, risk appetites, remuneration policies, and staff training. Product governance processes will require robust target-market assessments and ongoing suitability reviews. Disclosure documents must use plain language and be tested for comprehension. Complaints management systems need to prioritise fair, timely resolution with root-cause analysis to prevent recurrence. Institutions must also implement management information systems that track TCF metrics – such as complaint volumes, claim rejection rates, and customer satisfaction scores – and report these to the FSCA.
Retirement fund boards face particularly demanding responsibilities. As the governing bodies of member-based entities, trustees will be subject to enhanced “fit and proper” requirements covering honesty, integrity, competence, and relevant experience. COFI will empower the FSCA to set conduct standards for board governance, remuneration, and transformation. Boards must ensure that fund rules, investment strategies, and administration arrangements deliver TCF Outcome 2 (product suitability) and Outcome 5 (performance as expected). This means rigorous due diligence on service providers, regular member communication in accessible formats, and proactive management of investment underperformance or administrative delays. Member education initiatives – such as retirement planning tools or benefit counselling and statements – must avoid information overload while meeting Outcome 3 standards. My opinion…..benefit counselling needs to be improved materially.
Service providers, including third-party administrators, asset consultants, and investment managers, will operate under direct COFI licensing for activities like benefit administration. They must demonstrate TCF alignment in their contracts with funds, ensuring fair fee transparency, timely processing of contributions and benefits, and seamless data sharing. Where they provide advice or member-facing services, suitability assessments become mandatory. COFI extends retail customer protections directly to fund members, closing previous gaps where institutional relationships sometimes diluted individual accountability.
Implementation will be phased over an anticipated three-year transition period. Funds and providers should already be conducting gap analyses against existing TCF self-assessment tools, updating policies, and piloting enhanced monitoring dashboards. Challenges include increased compliance costs, the need for cultural transformation in traditionally compliance-driven organisations, and the complexity of applying retail-focused outcomes to collective retirement arrangements. However, the benefits are substantial: stronger member trust, reduced litigation risk, improved contribution compliance, and a more resilient retirement savings system.
Ultimately, the COFI Bill elevates TCF from policy to legal imperative. Financial institutions and retirement fund boards that treat fairness as a strategic priority – rather than a regulatory checkbox – will not only meet new standards but also foster long-term customer loyalty in an increasingly competitive and digitally enabled market. For South Africa’s retirement fund sector, where millions rely on these institutions for financial security, successful TCF implementation under COFI will be measured not by paperwork, but by tangible improvements in member outcomes.
ENDS
