When you are faced with issues or disputes with your financial adviser it is important to understand your position and any relevant resolution processes available. It is helpful to speak to your adviser and express your grievances to them first. If you are unable to reach an agreement on the issue, however, there are different means by which you can make a complaint. This article will explain the complaints process with regards to an entity’s Financial Services Guide.
A. What is a Financial Services Guide?
Part 7.7 of the Corporations Act 2001 (Cth) states that any entity which provides financial product advice to retail clients must, amongst other things, prepare and provide a Financial Services Guide. The ASIC Regulatory Guide 175 sets out the requirements involved in producing a Financial Services Guide including when it must be provided, what must be included, how it must be provided, and other obligations. A Financial Services Guide ought to be provided to a client as soon as it is practical, when it is requested (if it has been lost) or, depending on the circumstances (such as in ‘time-critical’ cases), after the service has been provided. As per section 941E of the Act, it is also integral that the information contained in the Financial Services Guide is kept up to date.
B. Which entities must provide a Financial Services Guide?
Not all entities are required to provide a Financial Services Guide to their clients. The circumstances where a Financial Services Guide need not be provided include where:
– The client is not a retail client;
– Information that would ordinarily be contained in a Financial Services Guide is provided by other means, such as a Product Disclosure Statement (NB this only applies where financial services pertain to a recommendation, sale or issue situation);
– The financial service relates to certain interests or products including, but not limited to, an interest in a cash management trust or a basic deposit product;
– General advice is being provided in a public forum;
– The general advice regards the issue or distribution of financial products that is not provided in a meeting or is provided in a telephone call (NB other requirements must be satisfied); or
– No financial service is actually provided to the person.
C. How do I make a complaint under a Financial Services Guide?
As per sections 942B(2)(h) and 942C(2)(i) of the Act, a Financial Services Guide must detail the dispute resolution procedures that the entity has in place. This can be seen as collateral to the duty of the licensee entity, enunciated in section 912A(1)(g), to have an adequate dispute resolution system in place. That is, the entity itself can define its own complaints process. These processes involve certain steps and often include the requirement to contact the entity first to raise the concern. Where your issue has not been resolved, the Financial Services Guide will direct you to the Financial Ombudsman Service or some other external dispute resolution scheme or professional body. These services will determine the scope of your complaint and decide what the relevant remedies are, which may or may not include an award of compensation.
The Financial Services Guide of an entity will be a useful tool when you or your business is in dispute with a financial adviser. It is important to understand which entities are obliged to provide a Financial Services Guide and, where a Guide is provided, have a thorough understanding of the relevant processes.
This article was authorised by Warwick Heeson.