Inside Money : How to complain without pain

The Australian financial services industry seems to always be under review. Photo / Thinkstock

For as long as I've known it the Australian financial services industry has been under a review of one kind or another - there's always something to complain about with money.

Of current interest in Australia are the compensation arrangements for clients when their financial advisers stuff up.

As part of its 'Future of financial advice' program the Australian government has commissioned a paper to investigate the pros and cons of various compensation methods.

While Australia already has a low-cost financial complaints and compensation system, it does have a number of holes.

For instance, some Aussie advisers were able to avoid paying up by dissolving their firms and popping up elsewhere. Another issue has been the inadequacy of professional indemnity (PI) insurance to cover clients' losses where their adviser has been at fault - but PI insurance was never intended to be an ultimate safety net.

The relative uselessness of PI - from the clients' perspective - has been a problem here too, as the collapse of the case against the insurer of the defunct advisory firm Vestar epitomised.

(On that, it looks like the Vestar legal war is dragging on and on. Good luck.)

The Australians are considering some solutions to the problem such as improving PI and/or creating an industry-funded statutory compensation scheme, developments New Zealand regulators will be watching with interest.

But New Zealanders can now at least, like our trans-Tasman buddies, complain about their financial advisers without having to go to court. A few organisations such as Financial Services Complaints Limited (FSCL) are standing by, waiting for your call.

I'm not sure if FSCL or other complaining bodies have had to deal with any cases yet - wouldn't be surprised, though, there's always something to complain about with money.