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Advisers still getting to grips with regulation

Although the Financial Advisers Act has been in place for more than two years some advisers still aren’t doing all that is required by law.

Friday, September 13th 2013, 6:49AM

FSCL manager Trevor Slater told the Newpark Development Day this week that some of the people joining his disputes resolution scheme recently hadn’t known that membership of a scheme was a requirement of registration.

Meanwhile a survey by the Insurance and Savings Ombudsman scheme found that 8% of its members did not have a complaints process set up for customers.
 
ISO spokesman Virginia Douglas said that one-person advice businesses needed to have formalised complaints processes in place.

Spokeswoman Virginia Douglas said people who did not have one needed to set one up immediately. “That was a big surprise to us… we’ve been doing work on that from the beginning and offer a template that they can just use.”

She said AFAs had a clear obligation under the Code of Professional Conduct. “One of the big take-outs is that we need to do some more work on that.”

Some advisers might not have complaints processes because they had not yet received complaints, she said. Others might deal with customer complaints directly over the phone.

“With bigger organisations it may be more of a visible process but you’re still required to have a process, even if it’s informal, to work through the process. It can be difficult to give confidence that you’re being independent and reviewing it objectively if it’s just you [in the business], it can feel like a false process but it still has value.”

Other feedback received by the ISO included queries over the $1000 fee it charges to deal with complaints.  Some respondents said the fee was expensive, especially if the dispute was only minor.

Douglas said the fee covered the costs of investigating and resolving a complaint, whether or not it was upheld. Even the simplest complaints took about 10 hours to complete.

« Increasing numbers of RFAs moving towards AFA statusAFAs set to produce their own annual reports »

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