Licensees need to apply a sense of urgency when dealing with client complaints or they may fall foul of the Australian Securities and Investments Commission, according to one legal expert.
The Fold’s Charmian Holmes explained that ASIC’s Regulatory Guide 165, which covers internal and external dispute resolution, was updated in June 2013. It now requires licensees to acknowledge client complaints immediately, and resolve problems in tighter, prescribed timeframes.
According to Ms Holmes, AFSLs with an inadequate internal complaints system could result in a license breach.
Under the new guidelines, said Ms Holmes, a complaint does not have to be made in writing, but a licensee must provide written acknowledgement of the client’s complaint as soon as it is received. The licensee then has 45 days to deliver the outcome and decision to the client. If they are unable to provide a final response, the client must be directed to an external dispute resolution scheme.
If the current system does not comply with these requirements, the system has to be changed
Ms Holmes warned licensees that if they did not incorporate the new timeframes into their complaints handling processes, they could face action by ASIC.
“ASIC has always expected complaints to be dealt with ‘genuinely, promptly, fairly and consistently’, however, they have changed the timeframes for dealing with complaints in order to encourage licensees to act with a sense of urgency.
“Licensees also cannot force the client to put a complaint in writing. If the current system does not comply with these requirements, the system has to be changed,” Ms Holmes said.
