The Financial Complaints Authority has proposed new rules that would expand its jurisdiction to deal with eligible complaints about conduct dating back to 1 January 2008.
In a submission to AFCA on the changes, the Financial Planning Association of Australia supported the intent of the measure but raised concerns about whether professional indemnity costs would cover legacy complaints reaching back more than 10 years.
The FPA sstated that it was important for consumers to have their complaints heard, but chief executive Dante De Gori said the new rule changes were unclear.
“It is unclear whether the consideration of the AFCA ombudsmen will be based on the law, codes, guidance and good industry practice available at the time the conduct occurred, rather than the current standards,” he said.
Mr De Gori said the association was concerned that PI policies would not cover potential legacy complaints and that would have a significant impact.
“If PI cover does not extend to legacy complaints under the conditions set in the proposed rules change, this will have a significant impact on the ability of licensees to pay any determinations made by AFCA in relation to legacy complaints,” he said.
The FPA told AFCA in its submission that the issue warranted urgent consideration and further investigation by AFCA with the professional indemnity insurance industry.
“Initial feedback from the insurance industry indicates that PI cover may be more expensive in the future should there be an increase in claims arising in relation to legacy complaints,” said Mr De Gori.
“This may include complaints that may have fallen outside the jurisdiction of predecessor schemes as set in the terms of reference applicable at the time the conduct occurred, which may now be accepted under the AFCA rules as at 30 June 2019.”
This industry is DOOMED!!!
what a bunch of Fu$$ckers
More evidence of legislation on the run
Wasn’t this the body that got a roasting at the Royal Commission? Don’t these guys get payments from the firms that were before the Royal Commission, IOOF, AMP etc etc?
Regardless, it’s good to hear from an association that represents product issuers on this matter. Although with members like that, and those connections, there success you’d think would be ZIP.
It would be interesting to see any associations that actually represent advisers have a similar opinion.
ASIC require that certain records are kept for 7 years from the date they are created. If advisers have destroyed hard copy (or electronic) documentation after 7 years they may find complaints difficult/impossible to defend.
When are we having a Royal Commission into ASIC’s misdeeds and incompetence? Not to mention an ombudsman service similar to ASIC but one where the public can claim against Politicians who cause them financial loss or harm by making decisions that aren’t in-line with what the public actually want even though they’re supposedly elected to represent the people? Mismanagement and misappropriation claims, given the waste of taxpayer money on public servants and inefficient rules, redtape and procedures would be astronomical…but might just improve the state of things
Why don’t the AFCA and ASIC get together and create a new law in the Corporations Act then backdate that law to misconduct that occured in the 1980’s and prosecute advisers based on a law that never existed at the time, then force the adviser to compensate the poor victim all losses plus accumulated interest then prosecute the adviser based on the new laws, ban him from the industry for 100 years and fine the advisers grandparents tens-of-millions of dollars, that would be fair and reasonable wouldn’t it?