FOS should be benchmark in EDR merger
The Financial Ombudsman Service (FOS) has used the results of a survey of financial counsellors on external dispute resolution (EDR) schemes to argue that while EDR schemes should merge, FOS' processes should be the benchmark in any merger.
The Financial Counselling Australia (FCA) report, ‘External Dispute Resolution: Results of a Survey of Financial Counsellors', which surveyed 197 financial counsellors, found that three quarters of financial counsellors rated FOS with a seven or above, with a weighted average of 7.8, while the Credit Investment Ombudsman received a rating of five or above.
Three quarters of respondents (74.6 per cent) said the FOS and the Credit and Investments Ombudsman (CIO) should merge but FOS' processes should be the benchmark.
FOS chief ombudsman, Shane Tregillis, noted the Financial Counselling Australia's support for the merger in order to reduce complexity for consumers.
"While competition in industry more generally is regarded as beneficial for consumers in lowering prices and improving services, the same cannot be said for competition in external dispute resolution," he said.
"The position of the Australian and New Zealand Ombudsman Association (ANZOA) is that competition runs counter to the core principles of an ombudsman scheme."
Tregillis also noted the Australian Securities and Investments Commission's (ASIC's) position that EDR competition would not improve consumer outcomes, which it outlined in the Financial System Inquiry.
While the respondents said success of the merger would depend on the execution, some respondents said FOS was the more professional of the two organisations, while one respondent said there was no financial data on the long-term benefits of such mergers.
"Typically expertise is lost by redundancy and customer service suffers due to unrealistic service goals. Having met representatives from FOS and CIO at the FC [Financial Counsellors] conference in Adelaide they are very experienced on what each is doing and deliver customer service on a range of clients' problems," one respondent said in the report.
Recommended for you
Advisers could find themselves unable to receive the fair market price of their advice as the Delivering Better Financial Outcomes legislation states superannuation trustees can reject deductions that are not charged on a cost basis.
Two advice professionals have shared five key takeaways as to how advisers can strengthen their communication with clients, especially at review time, in order to build deeper relationships.
The Financial Services Council has launched the Digital Advice Expert Group to support policy development around digital advice adoption and ensure greater accessibility for Australians.
MLC Asset Management’s managed account offerings have hit $2 billion in funds under management, underpinned by over half of financial advisers’ usage of the investment products.
