Govt signals support for single EDR scheme
A single external disputes resolution (EDR) covering the totality of the financial services industry appears to be on the cards, with the Federal Government appearing to have largely embraced the preliminary findings of the specialist panel reviewing EDR arrangements.
The preliminary report has seen the special panel recommend a single industry ombudsman scheme rather than existing arrangements of three schemes — the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal (SCT).
The Government's positive attitude to the preliminary report was indicated by the Minister for Revenue and Financial Services, Kelly O'Dwyer who said the Government was "committed to a one-stop shop for consumer complaints handling that provides consumers with access to justice, the independent determination of disputes, timely reviews and a robust compensation scheme".
The panel's findings run counter to many of the submissions it received, particularly from the superannuation industry which argued for retention of the SCT albeit on the basis of better funding and resourcing.
In outlining its views, the panel's interim report said it "considers that a shift to a single industry ombudsman scheme for these disputes would incorporate all the strengths of the existing industry ombudsman model — such as the focus on providing low cost, fair and accessible dispute resolution, the ability to innovate and adapt to changes in the regulatory and broader socio-economic environment, and the focus on improving industry behaviour — while addressing the problems that arise where the framework consists of multiple schemes with overlapping jurisdictions".
Dealing with the SCT, the report said the panel considered that the existing problems with the SCT "cannot be addressed within the existing tribunal structure, even with substantial reforms to funding, governance, appointment processes or other aspects of the legislative regime".
It said this was because the rigidity of the statutory model would continue to hamper flexibility and innovation, making it difficult for the SCT to respond to unanticipated future challenges.
"Recognising that the core purpose of the review is to make recommendations to ensure that the EDR system can deliver effective outcomes in a rapidly changing and dynamic financial system, the Panel recommends that SCT be transitioned to a new industry ombudsman scheme for superannuation disputes," it said.
The preliminary report is now open to further submissions.
Recommended for you
As AFSLs endeavour to meet their breach reporting obligations, a legal expert has emphasised why robust documentation will prove fruitful, particularly in the face of potential regulatory investigations.
Betashares has named the top Australian suburbs with the highest spare cash flow, shining a light on where financial advisers could eye out potential clients.
A relevant provider has received a written direction from the Financial Services and Credit Panel after a superannuation rollover resulted in tax bill of over $200,000 for a client.
Estimates for the calendar year 2024 put the advice industry on track for a loss in adviser numbers as exits offset gains from new entrants.
