The effectiveness of the new Australian Financial Complaints Tribunal announced in the 2017 federal budget will depend on the ultimate structure of the organisation, a technical expert in the industry has said.
SuperConcepts SMSF technical and private wealth executive manager Graeme Colley identified funding and the way in which the three existing complaints bodies were amalgamated as the two key factors that would determine the initiative’s effectiveness.
“Some organisations start with three silos and continue with three silos under a new umbrella,” Colley noted.
“Something that would work against it is if it becomes an amalgam or homogenous system.”
While he suggested a siloed arrangement would likely be the optimal operating model, he recognised a homogenous structure could work in some instances.
“You might have a superannuation complaints matter that might also involve financial advice. In that situation a combined structure might work,” he said.
“I’ve seen situations where people with a complaint have had to work out which tribunal to go to and end up in a bit of a see-saw between one or two organisations, whereas this might consolidate the issue.”
The formation of the new consumer protection body, announced last week, will see the Financial Ombudsman Service, Credit and Investments Ombudsman and Superannuation Complaints Tribunal merged into a “one-stop shop” for members of the public.
The move comes in response to the Review of the Financial System External Dispute Resolution and Complaints Framework headed by Professor Ian Ramsay.
The Ramsay review received submissions from 18 consumer groups calling for a single financial services complaints body in order to reduce overlaps in the existing system and eliminate inconsistencies and confusion in the current environment.
