Complaints Scheme Gets A New Look
The Age
Wednesday September 3, 2003
The body that handles complaints about financial planners, life insurance and managed fund sales and stockbrokers has overhauled itself - after users complained about the service.
Under the revamp, the Financial Industry Complaints Scheme has opted for conciliation, face-to-face interviews or phone hook-ups where possible, ahead of the old system where case managers wrote ``letters of advice" to the disputing parties. And it has taken steps to ensure that those complaining, as well as those defending the complaint, understand that they can access all the evidence.
FICS chief executive Alison Maynard said an independent review of the service had criticised the way FICS had handled some complaints and found that some consumers felt they had been dealt with unfairly. ``We needed that feedback and we wanted to improve," she said.
The review, conducted by two academics, also suggested FICS review its jurisdiction.
As it stands, FICS, which offers a free service to consumers, is limited to dealing with disputes about life insurance with a value of up to $250,000 and income protection insurance of up to $6000 a month. There is also a $100,000 limit applied to complaints about managed investments, financial advice or complaints about stockbrokers.
Changes to these amounts will probably be an extremely sensitive issue because FICS members- financial advisers, life insurers and stockbrokers - rely on professional indemnity insurance to cover any compensation awarded to a consumer.
In the first half of 2003, FICS received 640 written complaints, compared with a total of 973 for 2002. Ms Maynard said that of the 640 complaints received in the first half of this year, 258 were about life insurance, 263 about financial planners (more than for the whole of 2002), 69 about stockbrokers and 50 about managed investments.
FICS members are bound by the scheme's rulings, but dissatisfied consumers may take further action through the courts.
Under the Financial Services Reform Act, anyone with a financial services licence must belong to a complaints resolution scheme approved by the Australian Securities and Investments Commission, such as FICS.
© 2003 The Age
