CIO warns against dispute resolution merger
The Credit and Investments Ombudsman (CIO) has rebuffed the Financial Counselling Australia's (FCA's) use of a survey to argue for a merger of the two external dispute resolution (EDR) schemes, saying the ability to compare schemes and identify room for improvement is precisely why the current two-scheme arrangement should continue.
Responding to the FCA's survey on EDR schemes, the CIO chief executive, Raj Venga, said the report illustrated a merger between the schemes was not a high priority issue for the respondents.
"The fact that only 15 per cent of the FCA's members completed the survey also suggests merger is not high on the agenda of those at the coalface of client service delivery," he said.
He also said while the report showed there was room for improvement for the CIO, it also clearly recognised and indicated that there were different types of members in each scheme.
"FOS's big bank members are able to make commercial decisions to resolve complaints quickly, whereas CIO members are more likely to seek a merits-based decision, which will usually involve a longer process," Venga said.
"While consumers and their advocates might like quick outcomes, there is no room for criticism of a process that produces the right outcome."
Venga also pointed to those respondents who cautioned against a merger as they identified the different roles of the CIO and the Financial Ombudsman Service (FOS),and criticised the FCA for disregarding those views.
"Financial counsellors are involved in only 2.9 per cent of complaints received by CIO. A more accurate picture is painted for us by the experience of those complainants. In 2015/16, 61 per cent of complaints were resolved in favour of the consumer," Venga said.
He said surveys showed 66 per cent of consumers were satisfied with the CIO's service, which was a greater proportion of consumers being satisfied with the services than those that received a favourable outcome.
AUTHOR
Malavika Santhebennur
Recommended for you
Shadow financial services minister, Luke Howarth, has stressed the Coalition’s commitment to reforming the CSLR, adding that he ultimately wants to “get rid of it”.
With just over three weeks until the federal election, the FAAA has put a reduction in red tape and further support for new entrants on its priority list for an incoming government.
The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered.
Rather than taking a controlling approach, the latest generation of overseas private equity deals is helping advice firms to achieve their growth ambitions, three commentators have said.
