Financial planning, managed investment disputes soar: Ombudsman
The Financial Ombudsman Service (FOS) has reported a 55 per cent increase in financial planning disputes and a 152 per cent increase in managed investment disputes in the six months to June 30 this year.
These increased disputes have contributed to a 33 per cent increase in new disputes over the period recorded by the FOS’s investments, life insurance and superannuation division (ILIS).
By comparison, ILIS — formerly the Financial Industry Complaints Service (FICS) and currently one of three FOS divisions — posted a 4 per cent increase in new disputes in the six months to December 31, 2007.
ILIS also posted a 9 per cent increase in life insurance disputes, while there was a fall of 23 per cent in stockbroking disputes in the six months to June 30 this year.
In the same period there was a 26.7 per cent increase in cases relating to variable rate home loans, a 62.7 per cent rise in cases relating to fixed rate home loans and a 9.4 per cent rise in credit card cases.
ILIS ombudsman Alison Maynard said the main areas of dispute within financial planning and managed investments in the period were inappropriate advice, standard of service, misrepresentation, and redemption delay.
“Our inaugural review of disputes has revealed a significant increase in disputes in the areas most affected by overall economic conditions,” she said.
“Volatile market conditions and falls in the value of investments will reveal inappropriate advice and highlight service and administration issues.”
FOS as a whole posted a 22.8 per cent increase in the number of new disputes received across the financial services sector in the 12 months to June 30, 2008.
Its banking and finance division (which covers a very broad range of financial services providers) posted a 22.7 per cent increase in new cases, and its general insurance division a 12.6 per cent increase.
Recommended for you
Financial Services Minister, Stephen Jones, has assured the cost and time to enter the financial advice profession will soon be halved, as shadow treasurer Angus Taylor pledges to reach 30,000 advisers.
The positive results of the latest financial adviser exam have helped the advice profession reach 15,600 yet again, according to Wealth Data analysis.
Financial advice firms have told Adviser Ratings they are planning to increase their compliance spend by almost a third, including on enhancements to their cyber security which ASIC has identified as an enforcement priority.
The digital advice platform is officially launching into the financial advice sector, offering up its services to practices as a means of engaging with the next generation of clients.
