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
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
