Licensees have shared how they are preparing for the reporting of the internal dispute resolution (IDR) regime data and reminded advisers of the importance of accurate complaints records.
Last week, Money Management detailed how a firm’s IDR regime data must be reported to ASIC by 29 February 2024.
This will be the first time most smaller Australian financial services licensees (AFSLs) will have had to do so under a staged implementation which began last year. Reports will need to cover from 1 July 2023 to 31 December 2023, and if a firm has received no complaints during the period, they must still submit a “nil submission” to ASIC confirming there are no complaints.
Failure to submit a report means the firm will be in breach of IDR reporting and may involve penalties.
Keith Cullen, chief executive of WT Financial which looks after more than 400 practices, said: “We have lodged our IDR already and have to do one for each of the licensees. Everyone needs to keep an IDR record anyway, so I don’t think it has created much burden. They have had a lot of notice; it isn’t like it’s been sprung on us.”
Over at Lifespan Financial Planning, chief executive Eugene Ardino, said: “We have all the info we need and have been working through it.”
However, advisers are warned that it may be the responsibility of licensee to report to ASIC, but there are still duties for them to be aware of.
Ardino added: “We have been educating our advisers on their complaint management rules and reporting. The reporting to ASIC is the responsibility of the licensee, but the adviser does have to tell the licensee if they get complaints, so we have had to explain to them what to do and how to report it to us.
“I’m not surprised some advisers aren’t aware of it as it’s the responsibility of the licensee, but they do still need to understand their obligations.”
For self-licensed financial advisers, Brian Pollock, director of corporate governance at The Principals Community, said: “It has been deferred a few times, so I don’t think a lot of people even know about it as it’s at the licensee level.
“We created a template as it is easy to get it wrong. ASIC thinks it’s straightforward, but its easy to mess up, so we have been checking forms to make sure they are correct. We also held workshops as I worry about licensees doing it themselves and getting it wrong.”
It is particularly important for advisers and licensees to leave sufficient time to submit the data correctly as if an IDR file fails to meet ASIC’s requirements, then the errors will still need to be corrected and resubmitted in time for the original 29 February deadline.
The data provided by the IDR reports will be used by ASIC to improve its capabilities as a data-driven regulator and give greater visibility of where consumers experience problems or harm.
Submissions must be completed by 29 February 2024, and ASIC is expected to publish data on the results following this. The data must be then be submitted on a six-monthly basis going forward.
