Adviser: Should case manager make the call?

More information is needed about the case managers who consider complaints about financial advisers, one industry commentator says.

Monday, December 24th 2018, 6:00AM 1 Comment

An IFSO case was the topic of much debate this year.

The adviser in question had sold products to a New Zealand man in 1993, who then moved to Perth.

In 2011, almost 20 years after the sale, his wife emailed the insurer, wanting to review the plan. She said it listed the financial adviser, but that neither she nor her husband had any contact from him since being in Australia.

IFSO backed the client and said the adviser had not done enough.

Advisers questioned how that meant they should deal with clients in future.

One, Murray Weatherston, said the fact the case had been handled by a case manager, not signed off by Insurance and Financial Services Ombudsman Karen Stevens, was a problem.

“Advisers have to be very wary that they are not going to be generally judged by an unappointed person whose ruling is not subject to legal challenge by the adviser who thinks everybody should be required to apply the gold standard. Is IFSO prepared to disclose who the case manager was and what is their experience and background? Is IFSO prepared to divulge who are the industry experts who fed the poor case manager with the view that the super-super-gold standard is ordinary practice?”

He said the case manager had made a number of mistakes, particularly around the assumption that a trail commission indicated an ongoing relationship or obligation on the adviser.

“No authority is provided for that view – it is pure assertion. I reckon that view is much more likely to be wrong than right. If it is right, then a large number of advisers who have been handed orphans over the years should wake up, figure out their liability if that is correct, and quickly hand the orphans back. Second, advisory companies who continue to receive payments for policies written by departed advisers because the manufacturer continues to pay a fee so long as the policy remains in force had better wake up and see if they have any potential liability.”

A spokeswoman for IFSO said the case followed standard process.

“Karen is aware of all decisions that go out, but does not make the decision unless a review is requested and relevant new evidence is provided.”

Trevor Slater, client director at Financial Dispute Resolution Service, said all the schemes formal decisions and determinations were only made by its adjudicator, Rex Woodhouse, on the basis of information provided by each party, “and without influence from the facilitation or conciliation process.  This may include taking verbal evidence at a hearing.”

Tags: complaints IFSO Murray Weatherston

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Comments from our readers

On 24 December 2018 at 11:31 am Mr Slater said:
Good point Murray.

At Financial Dispute Resolution Service we believe that the formal decision option (which is binding on members/participants) should only used when no other resolution options are available. If we do need to make a formal decision it has such a high level of importance it requires the decision to be made by persons who are suitably legally qualified and have financial industry experience. This is the process we follow at Financial Dispute Resolution Service.

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