Comply with me: new complaints body urges

A new disputes resolution service targeting financial advisers is being launched as the rush to comply with the coming regulatory regime intensifies.

Friday, October 16th 2009, 5:27AM 4 Comments

by David Chaplin

Financial Services Complaints Limited (FSCL), which will be offering discount rates to advisers who sign up by the middle of November, is seeking broad industry support before it officially goes live.

The scheme, initially funded by investment banker, Peter Marriott, has pitched its plan to the industry body umbrella group, the Financial Advisers Association (FAANZ).

It appeared FAANZ would adopt FSCL as its preferred disputes resolution scheme for the various industry bodies it represented. FAANZ chair and Institute of Financial Advisers president Lyn McMorran is one board member.

Trevor Slater, currently head of disputes resolution at the Banking Ombudsman, was working with FSCL as a "freelance consultant" to help design the scheme.

Marriott said while the FSCL board only met for the first time last week the scheme was well-advanced and could start "immediately".

However, he said the scheme would only take off if it attracted sufficient members.

"It's a bit of a chicken-and-egg thing."

As well as a one-off $500 joining fee, FSCL will charge members an annual fee of $500 and $1,000 for each complaint.

Under its ‘early bird' sign-up terms, Marriott said advisers would be charged a $400 joining fee and $300 annual fee.

"They'd be getting 18 months of service for $700 and the first complaint would be free," he said. "We'd also supply members an internal complaints handling manual.

According to Marriott, FSCL was the only operator catering specifically to financial advisers.

Marriott said both the Banking and the Insurance and Savings Ombudsman schemes, which had been touted as possible dispute resolution providers, were unlikely to operate in the adviser space.

FSCL had initially planned to hit the market early next year but decided to fast-track its launch to give advisers time to prepare for the new regime.

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Comments from our readers

On 16 October 2009 at 1:35 pm Andy said:

I see this whole compulsory complaints body membership a big farce! First, we are told that we must belong to a complaints and disciplinary scheme, and then we are told we have to pay for it and the process. Yet the banks' (employees) will not have the same criteria. It seems to me 1) that the powers that be do NOT want independent advisers and would much rather have (poor) advice continuing from inexperienced bank staff, and 2) this is yet another scheme to get money out of advisers and further reduce our profit margin. I liken this to us being "Guilty until we can prove ourselves innocent", and still having to front the costs. I would like to see the banks have to front up with $1000 for every single employee, and another $1000 per complaint. Call me a pessimist - but i don't believe this is going to reduce the losses to investors or clients. Instead, it is only going to shift the blame! At the end of the day, a client signs the document. It is up to them to get legal advice, and up to us to recommend it!

On 16 October 2009 at 2:58 pm Robyn said:

I'm amused that Lyn McMorran is on the board of this company. Having reluctantly just paid $700+ for another years IFA fees, I had assumed that any disputes system would be part of the fee for belonging to the IFA. If it is going to be an additional cost, why bother belonging to the IFA?

On 23 October 2009 at 1:29 pm Barry Brown said:

Don't we already have a Disputes Tribunal? Why do we need a new service and why am I being invited to pay for it?
More importantly, can I look forward to a reduction in my annual sub to the IFA (assuming it is still going to be worth belonging)?
Unfotuantely this looks like another ball drop by the IFA.

Barry BRown

On 23 October 2009 at 1:30 pm Barry Brown said: