Managed investment disputes double at Comm FP: FOS
The number of managed investments disputes from Commonwealth Financial Planning in its financial adviser/planner space has doubled in 2016-17 compared to 2015-16, according to the Financial Ombudsman Service (FOS).
The 2016-17 comparative tables of disputes statistics about financial services providers (FSPs) that are members of FOS revealed there were 27 disputes from Comm FP this year, compared to 14 last year.
The average dispute process reached, which is a measure of how far through the FOS’ process and the level of escalation the disputes went through before being resolved stood at 2.7, while 74 per cent were resolved by agreement, with nine per cent favouring the applicant.
The largest number of disputes came from small business with less than $100 million in funds under management (FUM), Australian Planning Services, which had 44 disputes. Only two per cent were in the applicants’ favour while 83 per cent were resolved by agreement.
In the life insurance space, Westpac had 17 disputes while Zurich had 12, and Commonwealth Financial Planning had 11 disputes. Majority of these were resolved by agreement.
In the superannuation space, AMP Financial Planning saw five disputes this year, with 33 per cent in the applicants’ favour and 67 per cent in the financial services provider’s favour. The number of disputes was down from nine last year.
CFP saw nine disputes in the superannuation space in relation to financial advisers/planners, up from eight last year. Three quarters of these were resolved by agreement, with 13 per cent in favour of the applicant while 13 per cent were discontinued.
FOS 2017 annual review revealed that of investment and advice disputes, 25 per cent involved mixed asset funds (investing in multiple asset classes such as cash, bonds, shares and property), with inappropriate advice being the main issue in 24 per cent of the cases.
In life insurance, almost half (48 per cent) the disputes involved income protection insurance, and the main issue was denial of claims.
AUTHOR
Malavika Santhebennur
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
