7 Comments 7 Commentsby Susan Edmunds
All financial service providers must be registered with a disputes resolution scheme.
Government-owned Financial Disputes Resolution (FDR) charges financial advisers $700 a year to be a member of the scheme, but also received a subsidy of almost $1 million from the Government last year. It had forecast the need to spend $1.694 million for the year.
The Government has previously hinted that it wants to reduce the number of dispute resolution schemes available for financial services providers to register with.
Financial Services Complaints Ltd chief executive Susan Taylor said her organisation had been vocal about the fact that FDR was an unnecessary addition to the complaints resolution sector. She said service providers who were with the FDR could easily be catered for by her organisation or the Insurance and Savings Ombudsman.
“We really feel no need at all for the Government reserve scheme given there are two private schemes open to all providers.”
She said the default scheme was suggested because when the resolution system was first proposed, it was assumed that various parts of the industry would form their own bodies. Financial services providers who fell through the gaps would need a reserve scheme.
“Then the Minister had a change of heart and allowed the reserve scheme to compete with private providers. They went out and actively sought members with advertising.”
Taylor said there was no evidence that consumers were adversely affected by having more than one scheme available to them. “We all have to play by the same rules.”
She said there had been no suggestions that providers were “scheme hopping”, moving to resolution providers that offered more favourable decisions.
FSCL is a private sector schemer, run as a not-for-profit.
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