Peter E Daly AM, Chair of Board

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WELCOME

Peter E Daly AM, Chair of Board LIAISON MEETING
SYDNEY 27 MAY 2005
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Alison MaynardChief Executive

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Fundamentals to FICS/ PS139

• Free to consumers
• Decisions binding on Members
• Cancellation on membership for non-compliance
• Paid for by Industry
• Licence condition

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Trevor SlaterNational Relations Manager

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Internal Dispute Resolution Workshopsfor FICS
Members

• A one day intensive workshop designed
  specifically for FICS Members to provide them
  with skills and information on how to avoid,
  manage and resolve complaints using their own
  internal dispute resolution process, thus
  avoiding the need (and cost) of referral to
  FICS.
• Conducted by Nina Harding, a highly experienced
  mediator and complaints handling trainer (La
  Trobe University and UWS) and Trevor Slater, FICS
  National Relations Manager.

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Internal Dispute Resolution Workshopsfor FICS
Members

• TOPICS COVERED INCLUDE
• What complainants want
• Dispute resolution skills and model
• Detecting deception
• Effective communication/understanding skills
• Creating relationships to resolve complaints
• Written and telephone complaints
• Using your time wisely
• Skills and information to avoid, manage resolve
  complaints

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Internal Dispute Resolution Workshopsfor FICS
Members

• Over 130 FICS Members have attended the workshops
• 100 have stated they would recommend the course
  to other Members
• I thought the combination of theory followed by
  practical examples and work-shopping these was
  very effective.
• I was very impressed.the quality and experience
  of the presenters and also the workshop content
  and supporting documentation.

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Internal Dispute Resolution Workshopsfor FICS
Members

• Tuesday 7th June, The Point, Story Bridge,
  Brisbane
• Thursday 14th July, Pacific International Suites,
  Perth
• Thursday 11 August, Royal Yatch Squadron Sydney
• Cost is 330 per person

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FICS ANNUAL CONFERENCEWorking
TogetherWednesday 5 Friday 7 October
2005Park Hyatt Melbourne

• Wednesday
• Pre Conference afternoon workshop for delegates
  who have not been able to attend the FICS IDR
  workshops
• The workshop will focus on methods and skills to
  resolve complaints before they escalate
• Conducted by Trevor Slater

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FICS ANNUAL CONFERENCEWorking
TogetherWednesday 5 Friday 7 October
2005Park Hyatt Melbourne

• Thursday
• Key note address Greg Tanzer - EDR Scheme
  Developments
• Chief Executives Report
• Panel workshops
• Prof Tania Sourdin on Compliant IDR Processes
• A Discussion panel of the Masu case
• Conference Dinner

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FICS ANNUAL CONFERENCEWorking
TogetherWednesday 5 Friday 7 October
2005Park Hyatt Melbourne

• Friday
• A Conciliation Conference demonstration
• Questions for the FICS Management Team
• A panel discussion on the Rules Review
• Prof Paul Mullen on Querulous Complainants

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MEMBER LIAISON

• Regular Liaison Meetings
• Melbourne 6 July
• Brisbane 20 October
• In-House IDR Training
• Formal presentations at PD days alike
• Informal issues discussions
• Discussion with industry associations, i.e. ALUCA

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FICS CONCILIATION CONFERENCE PROCESS

• FICS Conciliation Conference process formally
  commenced in August 2004
• FICS conciliation is a tailored mediation
  process for FICS
• Conciliation at FICS involves
• An independent Conciliator
• Open discussion of the issues and quantum in
  dispute
• Confidential, without prejudice discussions
• Timeframe of 2-3 hours
• No cost for participating in conciliation
• Cases assessed for Conciliation at two stages
• When a Members response is received
• If one or both parties request a conciliation

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FICS CONCILIATION CONFERENCE PROCESS

• Conciliation Statistics August 2004 April 2005
• 111 Conciliations held, 17 cases resolved
  pre-conciliation
• 44 financial planning
• 37 life insurance
• 11 managed investment
• 8 stockbroking
• Resolution rate 58 (7 cases still in
  negotiations)
• Average time to resolve case by conciliation
  59 days

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FICS CONCILIATION CONFERENCE PROCESS

• Conciliation Survey Results (sent to all
  participants)
• 97 agreed/strongly agreed were treated equally
• 77 agreed/strongly agreed it moved the
  complaint forward
• 99 agreed/strongly agreed conciliator was fair
  impartial
• FICS Conciliation Team is
• Michael Ridgway (Conciliation Manager)
• Dianne Comtesse (Conciliator)
• Alycia James (Conciliator)
• More information available at www.fics.asn.au

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THE ROLE OF THE FICS PANEL CASE MANAGERS

• The Panel Case Managers (PCM) receive a file
  after Conciliation has been unsuccessful or the
  Case Manager has determined the matter cannot be
  resolved.
• The PCM is responsible to ensure that there is
  available on the file all relevant material to
  assist the Panel in making its determination.

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THE ROLE OF THE FICS PANEL CASE MANAGERS

• Examine the material provided by both parties to
  the dispute.
• Clarify any discrepancies in the material
  provided
• Ask for all additional information relevant to
  the dispute from both parties
• Research the law, industry practice and related
  determinations
• Research Industry Practice
• Examining prior determinations

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THE ROLE OF THE FICS PANEL CASE MANAGERS

• Once a file has been examined with all these
  matters in mind, the PCM writes a Case Summary
  Issues letter to the complainant and the member
• The Case Summary and Document List are also
  forwarded to the parties.
• The parties are invited to comment on all the
  material provided, be it the case summary and the
  issues summary with the reassurance that the
  Panel/Adjudicator views the entire file.
• When the parties provide their submission in
  response to these letters, the PCM is then
  responsible for the exchange of the information.
• When the exchange has been completed, the PCMs
  next task is to present an organized file to the
  Panel/Adjudicator

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Michael ArnoldNational Panel Chair

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Panel Composition

• The Panels are made up of
• Panel Chair
• Industry Representative
• Consumer Representative

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Panel Process

• Panel Members consider all the material provided
  by the parties
• Panel debates the issues arising from the
  information
• The Panel can obtain expert or specialist
  information to assist it
• Panel seeks to achieve a consensus in relation to
  the decision
• If consensus is not reached a simple majority
  applies

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Scheme Decision-making

• Requirement for written reasons
• Scheme shall not rely on information that is not
  available to the parties except in special
  circumstances
• Where release of information would endanger or
  cause harm to any person, whether or not they are
  a party to the complaint or
• Where the information is commercially sensitive
  and this would be significantly jeopardised by
  its release to the other party or
• Where premature disclosure would destroy the
  value of the evidence.

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Available Remedies

• Remedies to be consistent with relevant laws
• Compensation for complainant for any direct loss
  or damage caused by breach
• Regards to be had to fairness and relevant
  industry best practice
• Ability to make appropriate non-monetary orders
  to resolve a complaint

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FICS Rules to Deal with Complaints

• Deal with the complaint on its merits and do
  what is fair and reasonable in the circumstances
  having regard to
• Legal rule of judicial authority
• Good insurance practice and any applicable code
  of practice

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Effective Decisions

• Complainant expected to abide by decisions
• Member bound to abide by decisions
• Enforcement
• Termination

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Decisions

• Written reasons
• Costs
• Interest
• Inappropriate complaints

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Alison MaynardChief Executive

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Complaints 2004

• Total Telephone Contacts 9,878
• Complaints that progressed to investigation
• Life Insurance 467 (441)
• Financial Planning 284 (419)
• Stockbroking 59 (95)
• Managed Investments 123 (83)

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Top Categories of Complaints 2004
Insurance Denial of Claim 62.0 Standard of
Service 11.0 Policy Terms
Conditions 9.0 Financial Planning Inappropr
iate Advice 55.0 Standard of
Service 19.0 Non Disclosure
Fees/Charges 10.0
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Top Categories of Complaints 2004
Stockbroking Inappropriate
Advice 39.0 Standard of Service 29.0
Share Transaction
Misunderstanding 27.0 Managed
Investments Misrepresentation 41.0 Standard
of Service 29.0 Inappropriate
Advice 20.0
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Complaint Outcomes 2004 - All Categories
In
favour In favour Outside
of Member of
Complainant Jurisdiction
Insurance 22 (187) 23 (199) 18
(151) Financial Planning 19 (112) 28
(167) 19 (112) Stockbroking 26 (41)
37 (58) 18 (28) Managed
Investments 20 (30) 22 (33) 21
(31)

Withdrawn Conciliation Conference Insurance
15 (125) 1 (10) Financial Planning 11
(68) 3 (16) Stockbroking 11 (17)
1 (2) Managed Investments 11 (16) 3
(5)
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Complaint Outcomes 2004 - Panel
In
favour In favour Outside
of Member of
Complainant Jurisdiction
Insurance 45 (87) 45 (89) 1
(1) Financial Planning 45 (66) 50
(74) 0 (0) Stockbroking 45 (27)
45 (27) 0 (0) Managed Investments
71 (20) 21 (6) 4 (1)

Withdrawn Resolved by Agreement Insurance
5 (9) 4 (8) Financial Planning 3
(4) 3 (2) Stockbroking 10 (6)
2 (1) Managed Investments 0 (0) 4
(1)
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Member Response Times 1st Quarter 2005
1-21 days
22 -35 days 36 -49 days 50 days
over Insurance 17.2 (11) 45.3 (29)
10.9 (7) 26.6 (17) Financial Planning 30.8
(12) 28.2 (11) 20.5 (8) 20.5
(8) Stockbroking 35.7 (5) 21.4 (3)
7.11 (1) 35.7 (5) Managed Investments
9.7 (3) 6.5 (2) 3.2 (1) 80.6
(25) All Industries 20.9 (31) 30.4 (45)
11.5 (17) 37.2 (55)
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Issues for Rules Review

• Time limits for acceptance of decisions
• Process for review of decisions
• Time limits more generally
• Oral hearings
• Scope of deed of release
• Rules do not exclude sophisticated investors
• Monetary limits