Speaking to InvestorDaily, Rockwell Olivier managing principal Peter Bobbin said the fact that FOS has assisted claimants in framing their claims has contributed to the perception.
“That has been one of the downfalls of FOS: adopting a procedure whereby they assist claimants in presenting their claim,” said Mr Bobbin.
“Once you have the perception of bias, the downfall begins and you get the groundswell of opposition that FOS is now suffering from. It’s that perception of bias that is driving the lack of trust,” he said.
However, despite some opposition to FOS, Mr Bobbin said he has had direct involvement with the ombudsman on behalf of his clients – both on the financial services side and customer side – and personally finds FOS to be receptive.
Responding to Mr Bobbin’s comments, a spokesperson for FOS pointed to section 6.1 of the FOS Operational Guidelines which “set out the types of limited assistance we can provide to applicants”.
“[The guidelines] are designed to assist in the fair and impartial assessment of a dispute,” she said.
“FOS does not act as an advocate for any party to a dispute. We impartially assess all disputes based on their merits and their specific facts and circumstances,” said the spokesperson.
Financial Planning Association chief Mark Rantall told InvestorDaily FOS is not permitted to advocate for the claimant and must remain impartial, citing ASIC Regulatory Guide 139 Approval and oversight of external dispute resolution schemes.
RG 139.101 states that: “A consideration of resourcing should include provision to assist complainants or disputants to draft and lodge their complaints or disputes. This does not amount to scheme staff advocating for complainants or disputants, and should not jeopardise the impartiality of the complaints resolution process.”
“RG 139.101 requires FOS to assist claimants in drafting their dispute as it relates to matters of fact including interpreting where that fact sits in relation to the legal framework,” said Mr Rantall.
“The process is if an applicant comes on unrepresented with a set of facts, then FOS tries to help them frame that in legal terms and they are required to do that under RG 139.101,” he said – adding that “they don’t go through that process if they are represented.”
In a submission to the independent review of FOS, the Association of Financial Advisers highlighted a number of issues it believes should be considered as part of a review of the external dispute resolution framework, including consideration of RG 139 and changes that could be improved to better enable FOS to provide the services in the best interests of all stakeholders.
AFA chief operating officer Phil Anderson said his organisation is “well aware” that FOS helps applicants in the preparation of complaints and understands it is a point of dissatisfaction within the financial advice industry.
“The provision of this assistance is problematic and certainly opens FOS up to the perception of bias,” Mr Anderson said.
“However, on the other hand, they are required by RG 139 to provide this assistance. The simple provision of this assistance presents a problem with respect to impartiality,” he said.
