Financial advice licensees have one month to notify ASIC that they have joined the new single external dispute resolution (EDR) scheme – AFCA – which commenced operation from 1 November to avoid facing further fees.
The new body, the Australian Financial Complaints Authority, replaces the Financial Ombudsman Services (FOS) for disputes within the financial advice sector but also picks up the responsibilities previously held by the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal.
In announcing the commencement of the new EDR scheme, ASIC stated all financial services licensee holders, including former FOS members, were required to be members of AFCA and must also notify ASIC of their AFCA membership details by 30 November 2018.
“Late fees will not apply if AFCA details are updated by 30 November. If transitioning firms update their AFCA membership details after this date late fees will apply,” ASIC stated.
In a note to its members, the AFA stated licensees were also required to update all references to their EDR scheme, including those on websites and in complaint response letters.
ASIC has, however, provided an exemption until 1 July 2019 for licensees to update their Financial Services Guide to include AFCA’s contact details instead of those of any previous EDR schemes.
Speaking at the launch, AFCA Chair, Helen Coonan said the Authority “… will play an important role in restoring trust in Australia’s financial institutions in the wake of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry”.
“We will influence reform in the financial services sector by raising standards and improving internal practices to reduce and resolve disputes,” Coonan added.
AFCA Chief Executive and Chief Ombudsman, David Locke said AFCA would engage in conciliation and negotiation to find fair solutions for all parties involved in a dispute.
“Where matters cannot be settled then we will make timely and impartial determinations based upon the evidence. Any determinations of AFCA, if accepted by the consumer or small business, is binding on the financial services firm involved,” he added.
