The corporate regulator has released research highlighting the need for better internal dispute resolution procedures across financial advice.
The research found that only 45 per cent of complainants who received an unfavourable outcome received an explanation of the decision made against them by the firm.
Further, only 21 per cent of complainants whose complaints were not resolved in the time frame set by ASIC guidance had the external dispute resolution (EDR) process explained to them.
ASIC said it was particularly concerned about those findings since each of these steps is essential to assist consumers to effectively escalate their complaint to an independent and external forum.
As for leading reasons for complaints relating to financial advice, customer service led the way with 44 per cent of citing it as a reason for making the complaint.
This was closely followed by fees or charges at 40 per cent, followed by the financial advice received at 37 per cent.
ASIC’s research also noted that consumers often had multiple reasons for making a complaint, and that understanding the overlap between different complaint reasons was also important for financial services entities.
For example, it said almost half (46 per cent) of those complaining about financial advice were also doing so due to fees and charges.
Another substantial cross over, according to ASIC, was complaints about products sales and customer service (48 per cent).
ASIC commissioner Danielle Press said that as the first step in the financial dispute resolution system, internal dispute resolution plays a vitally important role in Australia’s consumer protection framework.
“Consumers and small businesses should have access to transparent, fair and timely complaints processes. Our research shows the strong connection between consumer satisfaction in how a firm deals with a problem, and their confidence in that financial firm,” Ms Press said.
“Making a complaint can be a stressful exercise for many people and that there are clear opportunities for financial services firms to improve consumer experience and outcomes.”
Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.
You can contact him on [email protected].
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