1. FOS proofing your Business (insights from the inside) May 2011 Claire Mackay

2. IMPORTANT This is NOT a presentation by the Financial Ombudsman Service (FOS) The presentation are personal views of the presenter and DO NOT represent the views of FOS This presentation is SOLELY for the members of ICAA Financial Planning Special Interest Group who are all experts in financial planning and not consumers or members of the media

3. A bit about me BCom(Accg) LLB LLM Adv Dip FS (FP) CA (FP specialist) CFP member of FPA Admitted to NSW Supreme Court, NSW Law Society Tax Institute of Australia Ex PwC & Macquarie structured products Quantum Financial Services Australia Pty Ltd – family financial planning firm based in Chatswood founded in 1994

4. A bit about FOS Consumer complains to FOS & FOS provides Advisor / Licensee with opportunity to resolve No resolution leads to detailed info gathering & sharing & reply – possible to settle or have conciliation meeting FOS staff (mostly lawyers) examine matter & provide initial finding Consumer OR Advisor / Licensee can object decision and refer to FOS Panel FOS Panel – chair, industry rep, consumer rep decide – decision binding (complex cases always go to panel)

5. Things we have reviewed in our business Complete review of templates and internal processes Filenotes of meetings now emailed to client for their records All client instructions in writing (verbal followed by email) Ensuring at review meetings we explain any difference between SOA recommendations and actual Formalising regular informal client communication Formal regular client communication about BIG events that affect markets and consumer sentiment Recording of meetings and telephone discussions with clients (still considering)

6. If you do have to go to FOS Refer to Licensee, PI provider & FOS website for guidance – similar cases, professional assistance. Prepare thorough submission and get a professional colleague not involved to review & provide feedback Maintain professionalism in all correspondence Don’t take it personally & don’t get emotional – Eg Doctors see getting sued at least once just part of doing business Consider settling dispute (subject to PI) as there is a real cost – time, money and emotionally

7. Key take-aways 1.Get the basics right: – FSG, Fact Finder, Risk questionnaire, SOA, ROA, regular review, research – Document any differences between advice & actual 2.Review existing systems for potential weak areas & change processes 3.Keep communicating with clients to resolve difficult situations and avoid FOS 4.Recordings or contemporaneous emails confirming conversations with clients are your best evidence – When it is “he said / she said” you are the professional & expected to have best practice approach 5.Don’t take it personally – it is just business