Addressing delegates to the Association of Financial Advisers (AFA) national conference on the Gold Coast on Friday (13 October), Ms O’Dwyer listed the creation of the Australian Financial Complaints Authority (AFCA) as one of a number of key initiatives aimed to restore consumer trust in the financial services sector.
“As it stands, having multiple schemes which competes with each other creates extra cost for industry and confusion for consumers,” Ms O’Dwyer said. “[AFCA] will combine the strengths of an industry ombudsman and statutory tribunal. This is a game changer.”
The minister stressed that the new authority will be established with specific accountability mechanisms, including a requirement to report annually on activity to Ms O’Dwyer herself and to undergo regular independent reviews.
Ms O’Dwyer’s strong endorsement of the AFCA plan comes despite vocal opposition to the project from the Credit and Investments Ombudsman (CIO), one of the three existing dispute resolution schemes that will be made redundant under the government’s proposal.
“AFCA is not fit for purpose,” the CIO wrote in a submission to Treasury in July. “It is clear from the [external dispute resolution] framework documents that AFCA will neither provide better consumer outcomes nor be able to address past, or prevent future, financial scandals.”
The CIO formally declined an invitation to participate in the transition process to the new regime.