FDR compliant fees lower than suggested

Financial Dispute Resolution's (FDR's) complaint fees are lower than the Dispute Resolution table said in the current issue of ASSET magazine.

Friday, October 15th 2010, 12:18AM 3 Comments

The correct complaint fees for the FDR process are:

Level One: $775
Level Two: $2350
Level Three: $3270

ASSET magazine printed the "straight to FDR" fees rather than these fees which will be most commonly used by members.

FDR has also launched a membership option for ‘umbrella' groups, such as a franchisees or licensees. This means a group of advisers will only pay the base fee once, rather than having to pay $1000 membership fee each.

For example a franchise with 30 advisers would pay the one Base Fee of $1000 (for the group) as a membership fee, then $250 per authorised adviser. So the total cost they are paying is:

Base Fee: $1000

30 x authorised advisers @: $250 each = $7,500

Total of: $8,500

So for each adviser the fee is $8,500 divided by 30 = $283 per adviser, including GST.

If there are 200 advisers, the maximum fee cap kicks in of $20,000, so it will be only $100 per adviser.

FDR says organisations should use the fee calculator on its website to work out what they would have to pay.

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Comments from our readers

On 15 October 2010 at 5:16 pm traveller said:

It's not clear to me having read FDR's website, who will be appointed to hear disputes about, eg, financial planning, insurance or investment issues. It's all generalizations. Where will these people come from and how can the subject of a complaint be satisfied those people have an in depth knowledge of the subject they are to rule upon?

On 18 October 2010 at 11:40 am NJM said:

Traveller - see page 29 of September's Asset magazine. FDR head Stuart Ayres says: "they [FDR personnel] don't need to be experts in finance as it is about the systems, the process and the adjudication" and "you really want an adjudicator who can follow the process without having too much knowledge of the finance..."

I imagine this will be concerning to more than just you and I!

On 18 October 2010 at 7:38 pm traveller said:

Thanks NJM. If it was that simple! So much investment advice is subjective. The processes may all be fine but the conclusions and outcomes for clients from different advisers may be wildly different. Disputes largely surround an interpretation of a client's Risk profile and the subsequent choice of assets with which goes some level of research. I can't see an adjudicator without much knowledge of finance handling that satisfactorily