Investment disputes decrease
Investment disputes have dropped by 13 per cent compared to the 2010-2011 financial year, according to figures quoted by the Financial Ombudsman Service (FOS) at its national conference.
Lead ombudsman for investments, life insurance and super, Alison Maynard, said FOS was pleased the number of investment disputes was returning to more normal levels after the financial crisis.
There were 1,626 new disputes during the last financial year, a decrease of 13 per cent from 2010-2011. Fifty-seven per cent of accepted disputes were related to managed investments, including advice, disclosure, and disclosure of fees and charges.
The most common complaint from investors was that they were given inappropriate advice, Maynard said.
Fifty-eight per cent of the managed investment disputes involved a planner, while 31 per cent were about the fund manager.
Nineteen per cent of disputes related to superannuation. Forty-eight per cent of those disputes were about self-managed super funds, 23 per cent about retail funds, and 16 per cent about account-based pensions, Maynard said.
Those disputes relating to advice in super involved complaints that the advice the planner had given the client about super was inappropriate to their situation, she said.
Most disputes could be avoided through clear discussion of all aspects of risk and clear documentation in client statements of the discussion and subsequent agreements about the risk, she said.
Investors also had a responsibility to ask questions and tell their adviser if they did not understand the risk explanations, she said.
There has been a 25 per cent increase in general disputes resolved by FOS compared to the 2011 financial year, but only a 3 per cent increase in disputes resolved by joint agreement between the parties, according to FOS executive general manager for general resolution Michael Ridgway.
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