Both the IAP and IIAC agree the controversial practice has to go, but ‘name and shame’ may be the only recourse available to aggrieved clients hurt by banks and investments firms, warn advisors.
IIAC CEO Ian Russell is now highlighting all the progress that’s been made when it comes to the investment industry’s protection of investors. But one of the subjects he admits has yet to be resolved is the Ombudsman for Banking Services and Investments (OBSI) process for resolving complaints from the clients of banks and investment firms.
When someone submits a complaint to the OBSI the independent organization can recommend compensation to the person filing a complaint up to $350,000. In the first 16 years of the OBSI’s existence up to the end of 2012, only one firm refused to make compensation on an OBSI recommendation.
Since then the number of firms refusing to accept OBSI’s compensation recommendations has increased dramatically – 30 per cent went unpaid in 2013 – forcing the non-regulatory body to implement its “name and shame” requirements under Section 27 of the OBSI’s terms of reference.