NORTHERN TAX & FINANCIAL SERVICES
To some of the less genuine financial advisers out there, FOS is a dirty word. Mention that word and they will run for the hills. The more genuine ones are confident with their processes, strategies and applications so any mention of FOS is by themselves as part of your initial consultation, as they explain to you their Financial Services Guide (or FSG).
All advisers must give you one of these guides by law, and by rights should explain to you the complaints process and who FOS actually is. I am amazed how many clients do not know what this organisation is about.
I am amazed how many clients do not know what this organisation is about.
FOS is the ‘Financial Ombudsman Service’, who provides ‘fair, independent and accessible dispute resolution for consumers who are unable to resolve complaints with member financial services providers’.
This is a non-government, not-for-profit organisation who exists as an alternative for the consumer rather than follow the complaints process via what can be expensive legal action. FOS undertakes their work free of charge to the consumer, and those costs of the service are met by the members of the organisation (financial planners and advisers, insurers, banks, credit providers to name a few).
From our experience with working for clients during FOS disputes is that whilst their aim is to work efficiently and timely, cases can take from six months to up to two years depending on the level of detail the consumer can provide.
FOS is about transparency, and takes a non-bias approach to the disputes, and this important as no practicing adviser wants a dispute raised if they can help it. The non-practicing advisers are the ones that you need to be careful of.
Imagine the adviser who made recommendations to self-funded retirees, a couple to which the husband was quite ill, and the wife made the financial decisions. When presented with these recommendations, she only agreed to them based on the trust she had with the adviser, thinking that he was acting in their best interests.
It was proven after the fact that this recommendation was far from appropriate.
It was proven that the advice and the delivery was also far from appropriate. The adviser was in breach of his fiduciary duty (which I spoke about in this column two months ago), and broke many rules governing the Financial Services Industry.
The clients had little money left and had to resort to lodging a claim with FOS against the Dealer Group, the company that sat over the top of the adviser.
The adviser has been officially banned for life from practicing in Financial Services and his company went into liquidation, so the client couldn’t even seek compensation from him directly.
So where does the compensation come from?
The Dealer Group has to step up. They have to wear the dispute claim against them as they are the holder of the liability insurance to cover the actions of the adviser.
So usually a FOS Case Manager provides a recommendation, and if both parties do not agree with the amount of compensation, the case must be presented to the Ombudsman for Determination.
What our firm does is assist the client in presenting the case to FOS and acting on behalf of the clients who have suffered losses as a result of inappropriate advice and action.
I enter into each case fighting for what I believe in, and that is only what is in the best interest of the client. Read more at www.fos.org.au
The information provided is general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of a qualified advisor before you make any decision regarding any products mentioned. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly Northern Tax & Financial Services Pty Ltd employees or agents shall not be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.