by Susan Edmunds
In its submission to the Financial Advisers Act review issues paper, the insurer said that would increase the disputes experience and expertise within the scheme and increase the consistency of decisions across all disputes.
“Alternatively, if there are to remain multiple bodies, there should be robust guidelines to ensure consistent outcomes for consumers and jurisdictional limits should be regulated accordingly.”
The Financial Advisers Act issues paper suggests that a goal for disputes resolution schemes should be that consumers are aware of, can access, and are confident in using dispute resolution schemes.
Partners chief executive Naomi Ballantyne said there should be another goal: To ensure that no matter which scheme a financial service provider chose, the consumer obtained a consistent and fair outcome.
The issues paper asked what the impact was of having multiple dispute resolution schemes.
Ballantyne said significant work was needed to ensure consumers understood what did and did not constitute a dispute, how to identify potential issues during the advice process to avoid ending up in a dispute and how to go about raising a dispute with a scheme.
“There needs to be guidelines provided to disputes resolution bodies to ensure there is no ‘conflict’ in the decisions made by bodies when disputes have been taken against members of a particular Dispute Resolution Scheme (ie the financial service providers, who are also effectively their clients). We also believe jurisdictional limits should be regulated to be consistent across all Dispute Resolution Schemes for the benefit of the consumer who has not had any input into which scheme their disputes will be heard by.”
Claire Matthews, director of academic programmes at Massey University, said it would be hard to get all the financial service providers under one scheme. Some sectors naturally gravitated to particular providers: Banks are with the Banking Ombudsman, insurers with the ISO. To wind some schemes up would be heavy-handed intervention, she said.
"In the interests of competition it's better to have choice. If there is one you are giving that one a monopoly."
That could lead to less efficiency and higher pricing, she said.
Both Karen Stevens of ISO and Stuart Ayres of FDR are out of the country at a conference and FSCL's Susan Taylor is also out of the office until October.
Stevens said: “The Insurance and Savings Ombudsman Scheme has been operating for 20 years. Together with the Banking Ombudsman Scheme, the ISO Scheme was set up by the industry to provide consumers with a free, independent dispute resolution scheme well before the recent regulation. The introduction of mandatory membership of a dispute resolution scheme, and the emergence of four separate schemes, was the result of regulation in 2010. We continue to work within this system to provide a high quality dispute resolution service for customers of our 4000+ insurance & financial services members. The ISO Scheme’s key strength is our expertise and 20 years experience, which we continue to develop and share with both our members and consumers.”
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