All registered financial service providers must be a member of an external disputes resolution scheme. Financial advisers are members of IFSO, FSCL and FDR.

Non-profit schemes IFSO and FSCL each require 12 months’ notice to move to a new scheme, while FDR requires three.

FDR client director Trevor Slater said advisers had told him they thought long notice periods were unfair.

But FSCL chief executive Susan Taylor said it was because, if there was a complaint about an adviser, the conduct or advice being complained usually happened years earlier.

“Often it’s not until an insurance claim is declined, for example, that the client wishes to make a complaint about the advice received from their adviser some years earlier. The notice period allows a 12 month run-on period for a consumer to be able to make a complaint, if they wish, against an adviser who has left the industry (much in the same way as with most PI insurance policies, there is a run-on period).”

She said FDR could not consider a complaint about advice that happened before the adviser joined the scheme, and the notice period helped to counteract that.

"The 12-month notice period allows the consumer some protection.  However, once the notice period has expired, the consumer may be left without access to a dispute resolution scheme for a period of time. Clearly, that is not the intention of the legislation, nor a good consumer outcome."

The schemes all offer free membership to those who switch, to cover their notice period at their previous scheme.

Slater said FDR would also sometimes waive its notice period for members who left because they were dissatisfied.

"We can accept any complaint made against any member of Financial Dispute Resolution Service as soon as they are members of our Scheme. As is the case with all Schemes complaints can be accepted in any situation if all parties agree. I don’t believe that those advisers and financial service providers who have made the choice to move FDRS based on their view on the services we offer would suddenly object to us dealing with a complaint based on a technicality.

"However, I thank FSCL for providing a view on our Scheme Rules  so that we can clarify the situation for current and potential new members.

Taylor said FSCL too would sometimes waive or reduce the notice period, according to the circumstances.

“For example where an employed adviser changes employers and their employer is with another scheme, or an adviser is ill and unable to work.”