Wespoint adds weight to FICS’ expansion argument

The Financial Industry Complaints Service(FICS) is set to have its jurisdiction expanded, following an outcry over many Wespoint investors having lost too much to be eligible for a hearing.

FICS will also soon have a new name, according to Alison Maynard, FICS chief. The final decision on the new name has not been made, but it will include the word ‘ombudsman’. Maynard said FICS is consulting with its stakeholders on the exact wording of the new title and also on proposals to increase the monetary limit for the disputes it handles. “We’re asking our stakeholders what they think the appropriate monetary limit increases should,” Maynard said. FICS is also considering a rate of annual indexation for any future increases to the monetary limit. Currently FICS can only deal with complaints with a maximum claim of $250,000 for life insurance products, $6,000 per month for income protection policies and $100,000 for all other cases. She said the insurance product limit has not been changed since 1991 and the investment/advice complaints limit of $100,000 was set in 1999. “I think the limit for advice complaints should increase to at least $150-200,000,” Maynard said. “As well as inflation since 1999 there have been other changes with super, the introduction of choice of fund and an increase in funds under management.” The Westpoint scandal has also contributed to calls for an increase to FICS’ monetary limits as many of those investors stung by the collapse of the Perth-based property group had claims over $100,000. “A significant number of Westpoint investors were outside our limits – at least a third of them were not able to complain to FICS,” Maynard said. Meanwhile, the backlog of Westpoint cases is still building up with a Federal Court decision pending on FICS’ jurisdiction to hear the complaints.