SMSFs falling through cracks

A significant rise in the number of complaints being received by the Financial Ombudsman Service (FOS) has prompted the Minister for Superannuation and Corporate Law, Senator Nick Sherry, to urge a more vigilant approach on the part of financial services providers.

Sherry used the FOS data to urge providers to examine their complaints handling systems and assess whether they are providing adequate staffing to respond efficiently to distressed consumers.

However, the chief executive of the Association of Superannuation Funds of Australia, Pauline Vamos, suggested dispute resolution issues were more prevalent with respect to self-managed superannuation funds.

“Members of SMSFs are falling through the cracks in terms of their access to an effective independent and free dispute resolution service,” she said. “At the moment their only resource for complaints is through the courts.”

Vamos also pointed out that the Financial Ombudsman did not provide services to retail superannuation members.

FOS figures show disputes rose substantially in the first five months of this financial year compared to the same period the previous year, with a significant rise in the number of disputes forwarded to its investments, life insurance superannuation division.