In a Ministry of Business, Innovation and Employment survey, about 60% of those surveyed said they were unsure of the value of their membership of a disputes scheme, or that their membership did not give them good value for money.

More than 56% were unsure whether the scheme produced fair outcomes for providers.

Everett  spoke at a meeting of ombudsmen last week. He told them:  “Those numbers are too high.  Providers who lack confidence in a system – at least to the degree expressed in MBIE’s survey – are less likely to tell consumers what they are entitled to. We have to build confidence in ADR – among providers – if consumers are to enjoy the benefits of it.”

Many financial services providers still did not realise that the schemes were not just designed as advocacy for consumers, he said.

He said the FMA was planning to work out memoranda of understanding with disputes resolution providers. It has already signed one with the Banking Ombudsman.

Everett said the job that complaints providers and the regulator did was likely to get bigger rather than smaller because retail financial services continued to confuse and perplex clients, new products and regulation prompted new disputes and people were still becoming more aware of the service provided by EDRs and ombudsmen.

But eventually, regulation should slow the flow of complaints.

Putting customers first under the Financial Markets Conduct Act would mean financial services providers being keenly aware of the difference between what people can be persuaded they want and what they actually need, Everett said.

He said the FMC Act would lift industry standards with its new fair dealing provision.

“I am often asked what the effects of the Act will be overall. Over the long-term – say five-years – I anticipate one of the biggest changes will be a shift in culture in financial services…Boiled down, the conduct provisions of the new Act say to professionals: ‘Make sure you put the concerns of the consumer first. Always.’”

He said the difference between what people could be talked into in retail financial services and what they needed could be quite big.

“Another feature to look at is whether customers’ use of the product actually fits with its design and the intended outcomes? If not – is that a product design issue, a mis-selling issue, an education issue? In future, in New Zealand, you will have to be able to answer those questions – and others – in order to make the cultural shift we anticipate.”