Dispute resolution under microscope
The Federal Government has released the terms of reference for a review into the dispute resolution and complaints framework in a response to the Financial System Inquiry (FSI), which called for improvements into the framework relating to the external administration regime.
In calling for the review, Minister for Revenue and Financial Services, Kelly O'Dwyer, said a panel of experts would examine the Financial Ombudsman Service (FOS), the Superannuation Complaints Tribunal (SCT), and the Credit and Investments Ombudsman, and would look into efficiency, equity, complexity, transparency, accountability, comparability of outcomes and regulatory costs.
"The terms of reference also allow for comprehensive consideration of the effectiveness of the existing framework, as well as consideration of different models in providing effective avenues for resolving disputes," O'Dwyer said.
The review would make recommendations on:
- The role, powers, governance, and funding arrangements of the dispute resolution and complaints framework and its ability to provide effective complaints handling processes for users, including its relationship with internal dispute resolution;
- Overlaps between the bodies (including legislative limitations on disputes each body can consider) and their impacts on effectiveness of outcomes for users;
- The bodies' ability to work with the government, regulators, consumers, industry, and other stakeholders to enhance the legal and regulatory framework that results in better outcomes for users; and
- The value of different models and how they would be implemented to provide effective avenues for resolving disputes.
A Money Management editorial noted that the Government was keen to keep external disputes resolution funding "off-Budget", adding that the Government was already drawn towards an industry-funded Australian Securities and Investments Commission (ASIC).
Both the CIO and FOS noted limitations in the terms of reference, with FOS pointing out that the panel would only be able to make observations rather than recommendations on a compensation scheme of last resort, but said this was vital as it recognised a gap in the current regulatory framework.
The independent panel, comprising of a chair, and two members, and backed by a secretariat from Treasury, has sought a three month extension, and must report to the Government by the end of March 2017.
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.
