ISO taking online applications now!
16/09/2010
In mid-August the Financial Service Providers Register (FSPR) opened.
People and businesses who provide a range of financial services can now apply to be registered.[1]
Financial advisers must join an approved dispute resolution scheme before beginning their application for registration.[2]
Four schemes have now been approved. They are
Sovereign has previously announced the ISO as their preferred disputes resolution scheme provider.[3] The ISO was selected due to its reputation, credibility and its long establishment in the financial services industry. The scheme is available to investment, mortgage and risk advisers.
There is no joining fee. Participants will pay $400 + GST per annum. Businesses pay the same rates on a per employee basis, up to a maximum of 35 staff (maximum $14,000).
Sovereign has negotiated a 25% discount for all SovNet advisers. SovNet advisers will pay $300 + GST per annum (or up to a maximum of $10,500 for businesses). This is a very competitive offer when compared to the others in the market.
SovNet advisers who join ISO after 1 January 2011 will pay $150 + GST for the first 6 months of membership, and then standard annual fees thereafter.
A complaint fee of $1000 is payable by all participants for every accepted complaint.
One noticeable distinction between the ISO and FSCL is the maximum level of enforceable compensation. Whilst the ISO is set at $200,000, FSCL has a limit of $100,000 (unless agreed by both parties). The ISO is currently working with the Ministry of Consumer Affairs to overcome this anomaly and establish a level playing field. This point was recently in the media, so it may be a concern that is top of mind for advisers.
Post application, advisers will be provided with full details on the ISO scheme, including advice on establishing their own internal dispute resolution process (a requirement of ISO membership and the Code). In addition, Sovereign is looking at ways it can also support advisers to have an effective internal disputes resolution process.
Applying to join the ISO
The ISO is now accepting applications via its website. Advisers can join the ISO on-line via www.iombudsman.org.nz. It is a simple process that should take no longer than 5 - 10 minutes.
Further questions
[1]Financial advisers need to be registered by 31 March 2011
[2]Most financial service providers who provide a service to retail clients must belong to an approved dispute resolution scheme or the government reserve scheme. Financial advisers who provide advice on behalf of a business which are already a member of a dispute scheme do not have to join separately, but only if they are obliged to join a scheme solely because of the work they do for that business.
[3]It is important that advisers do their own research and select a disputes resolution scheme that best suits them.