Advisers to Have Say on FOS as Review Announced

Financial advisers will be able to make comments on the operations of the Financial Ombudsman Service (FOS) after the Federal Government released the terms of reference for the independent review of external dispute resolution (EDR) schemes.

FOS will come under review, along with the Superannuation Complaints Tribunal and the Credit & Investments Ombudsman, as part of a wide ranging examination of the three EDRs which will be led by a three-member independent expert panel supported by a secretariat from Treasury.

The panel will provide a final report by the end of March 2017 to Minister for Revenue and Financial Services, Kelly O’Dwyer, who stated the review would invite submissions from the public as well as consult with a range of industry and consumer stakeholders.

“The role, powers, governance and accountability of the existing financial system external dispute resolution and complaints framework will be reviewed by the panel,” O’Dwyer said.

“The terms of reference also allow for comprehensive consideration of the effectiveness of the existing framework, as well as consideration of different models in providing effective avenues for resolving disputes.”

The terms of reference state the review would make recommendations on the role and powers of three schemes in providing effective complaints handling processes for users and whether there were gaps or overlaps between the three bodies which impacted their effectiveness for users of the schemes.

The review follows on from the Federal Government’s response to the Financial System Inquiry and may make observations, but not recommendations, on the establishment of a statutory compensation scheme of last resort.

FOS has welcomed the release of the terms of reference and endorsed the work of the independent expert panel with its Chief Ombudsman, Shane Tregillis, stating: “FOS is committed to the principles of fair, open and simple resolution of financial disputes. Reducing complexity for consumers in accessing effective independent dispute resolution has the strong support of FOS”.

Advisers planning on making a submission can direct inquiries to EDRreview@treasury.gov.au.