- Panel Suggests Dispute Schemes Be Merged
- ASIC Accepts EU From WA Advisory Group
The independent expert panel tasked with conducting a review of the Financial Ombudsman Service (FOS) has floated the idea that it become part of one external dispute resolution (EDR) service that covers the whole of the financial services sector.
The three-member panel, chosen earlier this year by Minister for Revenue and Financial Services, Kelly O’Dwyer, has been tasked with reviewing the work of FOS, the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal (the SCT).
In an issues paper released this week the panel stated the Terms of Reference for the review “require the panel to provide recommendations on the merits and any issues related to alternative models of dispute resolution”.
As a result, the panel has suggested the three existing schemes could continue to operate as they currently stand but also employ a triage service which would provide a single point of entry for dispute resolution for consumers, with information then passed to the relevant EDR.
The paper also suggested the creation of a new single body which would cover all consumer disputes in the financial system which would in turn lead to less consumer confusion about where to lodge a dispute, more consistent outcomes and reduced costs for regulators.
While the panel has offered a single body as an alternate it has asked the financial services sector for feedback on who should decide the scope and number of EDRs and if a single integrated body would be able to deal with the specific features of the different sectors and products of the financial system.
Submissions on the Issues Paper (available here) close on 7 October and will be used to form an interim report to be released later this year, ahead of a final report in March 2017.
ASIC Accepts EU From WA Advisory Group
A West Australian financial advisory group has offered an enforceable undertaking (EU) to the Australian Securities and Investments Commission (ASIC) after concerns were raised over the adequacy and application of the group’s risk management and compliance frameworks.ASIC accepted the EU from Perth based Neo Financial Solutions Pty Ltd (Neo FS), which has 160 individual and corporate authorised representatives, following surveillance of the licensee by ASIC.
This activity focused on Neo FS’s general obligations as an Australian financial services licensee, including its compliance and risk management framework, as well as tests of financial product advice provided to retail clients and the internal advice audits and remediation reviews conducted by Neo FS.
ASIC stated that Neo FS had failed to employ appropriate risk management and compliance frameworks in line with the nature, size and complexity of its business.
In regards to the provisions of financial product advice ASIC said its concerns included failing to address important client objectives, not making reasonable enquiries to determine all relevant client circumstances and not fully considering the consequences when replacing existing financial products.
The surveillance activity has led to the acceptance of the EU by ASIC, which acknowledged the co-operation of Neo FS’s management in resolving its concerns, and will require Neo FS to engage an independent expert to assess, report and make recommendations about its risk management and compliance frameworks.
