Financial Services Complaints chief executive Susan Taylor says many advisers maybe thinking, or hoping, that there won’t necessarily be a long road ahead for the schemes because consumers will be so happy with the services provided there won’t be any complaints nor any reason for disputes resoltion schemes’ continued existence.

“Unfortunately, much as I would like to, I don’t share that optimism, she said in a presentation at the FSCL conferene last week.

Since FSCL started nearly five years ago it has formally investigated more than 600 cases and has handled more than 7400 complaints and enquiries.

“These figures demonstrate a demand and need for our services.”

She says there will always be some complaints that cannot be resolved and that will need, or benefit, from an independent, expert third party helping to mediate or determine an outcome.

She also thinks the regulators and government agencies should recognise the good work the schemes do.

“I confess that I wonder if the Ministry has ever come to grips with the usefulness of dispute resolution. 

“Our approach has always been that the blunt instrument of threats of fines or imprisonment is not the best way to improve service delivery in the financial services sector. Rather analysis by a body familiar with the issues – a body which can satisfy the consumer and assist the financial service provider - is a better solution.” 

The Act governing the schemes will be part of the review of the Financial Advisers Act this year, and the question of whether there should be four schemes or fewer will come up.
Taylor says FSCL is doing a good job delivering its services.

“Our record of annual fee reductions for the past two years speaks of our efficiency.

“We consider ourselves to outperform all other schemes (in the key areas). We will continue to seek even further improvement in our services, and the way we deliver them.”

Dispute resolution schemes have an important role to play in markets, she said.

"We are not a regulator, so we genuinely want to work with financial service providers to improve services. Falling short of the standards required will have consequences, but we are only interested in compensation, not penalty. 

"It is important that the industry shows the regulator and the legislature, that financial service providers and disputes resolution schemes have the capacity to maintain standards and consumer confidence without further state intervention and regulation."