Reserve dispute resolution scheme revealed
The reserve dispute resolution scheme for financial advisers will be provided by Dispute Resolution Services Limited (DRSL).
Tuesday, June 22nd 2010, 5:03AM 
3 Comments
by Jenha White
Neil McKellar, chief executive of DRSL says the company was advised it was the preferred tenderer by the Minister of Consumer Affairs at the end of April.
"Our appointment is subject to contract negotiations, Cabinet approval and appointment by the Governor General. The Ministry of Consumer Affairs is managing that process," he says.
DRSL is a specialist dispute resolution company with more than 10 years' experience. It is calling its service for financial advisers the Financial Dispute Resolution (FDR) scheme and it has a network of independent financial sector consultants it will work with.
The government is currently working on FDR's fees but says they will be in line with industry-led scheme charges.
The FDR scheme provides a three-level complaint process, which aims to resolve disputes efficiently and thoroughly.
Disputes that can't be resolved move through the dispute levels and scheme members are charged a higher complaint resolution fee at each level.
If an agreement between the parties cannot be reached, FDR will issue a formal decision. If a complainant is satisfied with the outcome of the formal decision it becomes binding on the scheme member.
Complainants who are still not happy with the outcome have the option of taking their dispute through other channels such as the Courts or the Disputes Tribunal.
There is also a compensation cap of $200,000. A complaint can be taken to FDR that involves more than $200,000, but the maximum compensation available will still be $200,000.
To register for the complaints process, the complaint is assessed for jurisdiction and deadlock to see if it can be considered by FDR.
The complaint must have already been made to the scheme member, and the scheme member given an opportunity to resolve it. The complaint must also be about an event that happened on or after 1 October, 2010 (the date from which FDR can accept complaints).
The scheme is currently open for registrations of interest but financial service providers and advisers can't apply to be scheme members until July 1.
Jenha is a TPL staff reporter. jenha@tarawera.co.nz
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I will be wanting to know what appeals process there is as part of my assessment of providers, together with understanding the extent of technical knowledge contained within the arbitrators/adjudicators.
They may well be extremely well versed in how to resolve a dispute, but do they know how to understand what constitutes "right behaviour" or "right advice"?
And if the complaint is deemed spurious, or even if it is ultimately found to be simply baseless, do I get my claims fees refunded?
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1) no mention is made of what the adviser can do if he/she is dissatisfied with the decision.
2) what effect is this likely to have on PI insurance premiums?