Ombudsman takes aim at government dispute scheme
The Turnbull Government's push to set up a "one-stop shop" for dispute resolution in the financial services sector continues to draw fire from industry associations and one of the ombudsman schemes earmarked for redundancy.Under reforms flagged in the May budget the government is advancing plans to merge the Credit and Investments Ombudsman (CIO), the Financial Ombudsman Service (FOS) and the Superannuation Complaints Tribunal (SCT).Kelly O'Dwyer, the federal minister for revenue and financial services, yesterday unveiled a panel of experts to advise the government on integrating the three schemes, which did not include a representative from CIO.Raj Venga, the chief executive of the CIO, told Banking Day he declined a Treasury request to join the panel because the enabling legislation for the proposed unified body - the Australian Financial Complaints Authority - had not yet been passed by parliament."CIO has declined an invitation from the Minister of Financial Services to join an expert reference panel charged with working through the transition process for its proposed 'one-stop-shop'", he said."We will not participate in any transitional discussions until full details have been released by the government and the bill has been passed in parliament."It is entirely inappropriate for the minister to activate a transition team even before submissions from stakeholders have been released and industry has had an opportunity to debate it publicly and transparently."Venga slammed the composition of the four-member expert panel announced on Tuesday, which comprises FOS chief Shane Tregillis, SCT chair Helen Davis, small business advocate Robin Buckham and consumer representative John Berrill."None of the representatives on the expert reference panel are from industry," said Venga."Financial services providers who will be funding AFCA and who will be users of AFCA have been completely ignored."There is not even the appearance of any attempt to establish industry 'ownership' for AFCA."Venga also lashed the government over its rationale for establishing the new authority, saying it was an ill-conceived smokescreen for not having a royal commission into banking."The reality is that AFCA will neither provide better consumer outcomes nor be able to address past, or prevent future, financial scandals," he said."It is not equipped to weed out poor, entrenched corporate culture or address the string of financial scandals that regularly grace the pages of our newspapers."O'Dwyer described AFCA as an 'industry body' and has asked the transition team, led by former Reserve Bank assistant governor, Malcolm Edey, to consult extensively with stakeholders."It is important that the AFCA transition team draw on existing dispute resolution expertise and a wide range of views, to make sure the AFCA is fit for purpose and meets the needs of consumers, small business and industry," she said.Several financial services groups warned that the amalgamation of the disparate schemes would likely increase 'red tape' in dispute resolution processes.Andy Semple, director of the Association of Securities and Derivatives Advisers of Australia (ASDAA), noted that the SCT was a statutory body while FOS was not.He questioned how the merger of the two organisations could work given the differences in their legal status."It's