Ombudsman looks to open service to advisers
The Insurance and Savings Ombudsman service (ISO) is considering opening up its dispute resolution scheme to financial advisers, to help them meet impending regulatory requirements.
Tuesday, August 11th 2009, 5:09AM
by Sonia Speedy
The news comes as the ombudsman, Karen Stevens, reveals the existing ISO scheme experienced a 20% increase in complaints over the year to June 30, receiving 242 new complaints for investigation. It received a total of 2000 complaint enquiries - up 17.5%. Broken down, 59% of complaints related to fire and general insurance claims; 25% to life and savings products; and 16% to health, which Stevens says is in-line with last year. She puts the increased complaint volumes down to the recent financial sector crisis.
The requirement for financial service providers to become licensed and part of an approved external dispute resolution scheme - due to come into effect by the end of next year - will help ensure that advisers have the proper training, qualifications and skill base needed to sell products to consumers, Stevens says. She also believes there is a need for consumers to be educated about the seriousness of the insurance contracts they enter into, particularly as the ease of taking out policies and making claims increases.
Stevens confirmed that consideration is being given to extending the ISO service to cover advisers, but stated the decision lay with the ISO Commission and Board.
"I think that going forward the ISO has a major role to play in terms of the financial sector. We've been going now for 14 years, we've got a very good scheme, it's highly regarded and I think that we have a lot to offer," she says.
"A concern would be if you have financial advisers who have to go to another start-up scheme, it may not be in the best interest of consumers."
Investment Savings and Insurance Association chief executive Vance Arkinstall also believes a scheme extension is logical.
"In many cases the advisers are so closely aligned to the product providers it just makes sense for that to be under one roof, rather than have products considered by the ISO scheme and advice considered somewhere else," he says.
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