The Federal Treasury has confirmed industry stakeholders including financial planners will be faced with the costs of duplication created by the Government’s push to move to the Australian Financial Complaints Authority (AFCA).
A Treasury answer to a question on notice asked during the Senate Economics Legislation Committee inquiry into the legislation underpinning the AFCA confirmed there were unavoidable extra costs associated with the exercise.
The answer also seemed to confirm that the Government-appointed Ramsay Review panel which recommended the one-stop-shop external dispute resolution (EDR) body had been aware of the likelihood of duplicative costs but had failed to quantify them.
The Treasury answer comes against the background of industry concerns that the transition process will see the industry paying for as many as four separate EDR schemes, and the likelihood that the Superannuation Complaints Tribunal (SCT) will still be working to clear its backlog of cases in 2022.
In the answer to the question on notice, the Treasury said the Ramsay Review did not quantify the dollar figure associated with duplication due to the existence of multiple external dispute resolution schemes.
It said, however, that the review had found there were duplicative costs:
- For the regulator, the Australian Securities and Investments Commission;
- For member firms; and
- For industry and consumer stakeholders (for example, due to duplication of participation in reviews of schemes’ terms of references and guidelines).