A recent survey of its members found 8% did not have a complaints process set up for customers.

Spokeswoman Virginia Douglas said people who did not have one needed to set one up immediately. “That was a big surprise to us… we’ve been doing work on that from the beginning and offer a template that they can just use.”

She said AFAs had a clear obligation under the Code of Professional Conduct. “One of the big take-outs is that we need to do some more work on that.”

Some advisers might not have complaints processes because they had not yet received complaints, she said. Others might deal with customer complaints  directly over the phone.

“With bigger organisations it may be more of a visible process but you’re still required to have a process, even if it’s informal, to work through the process. It can be difficult to give confidence that you’re being independent and reviewing it objectively if it’s just you [in the business], it can feel like a false process but it still has value.”

Other feedback received by the ISO included queries over the $1000 fee it charges to deal with complaints.  Some respondents said the fee was expensive, especially if the dispute was only minor.

The ISO said the law required advisers to offer a dispute resolution scheme, irrespective of the merits of a complaint.

Douglas said the fee covered the costs of investigating and resolving a complaint, whether or not it was upheld. Even the simplest complaints took about 10 hours to complete.

“An investigation commonly involves discussions with the parties, reviewing the documentation, gathering additional information and then writing up the decision.  As many of you have indicated, we are a good alternative to going to court. We also believe the complaint fee represents good value for money compared with the costs of going to court.”

She said it was hard for advisers to get their heads around because it was a new compliance cost. Very few formal complaints had yet been received about financial advisers, she said.