1. Analysis of the adviser-client relationship Michael Arnold – Ombudsman, Investments Life Insurance & Superannuation, FOS Dick Viney – Ombudsman, Investments Life Insurance & Superannuation, FOS Adj Professor Wes McMaster – www.wesmcmaster.com

2. Agenda Introduction FOS Key issues in adviser - client relationship Other Feel free to ask questions at any stage

3. FOS Terms of Reference and process Different TORs/process depending on whether we received dispute before or after 1 January 2010

4. 1. Registration 2. Acceptance (inc jurisdictional review) 3. Early resolution (via Case Manager/concil iator) 4. Outcome (via Recommendation/ Determination) Complaints received pre and post Jan 2010 - process 1. Initial enquiry (inc jurisdictional review) 2. Case Management/ conciliation 3. Panel investigation 4. Determination

5. Some key features of “old” and “new” Terms of Reference - jurisdiction Complaints received pre 1 January 2010 Complaints received post 1 January 2010 Monetary limits (for financial products other than insurance) $150k per claim, (excludes interest) $500k per claim – compensation capped at $150k per claim (from Jan 2012 this will increase to $280k per claim) (excludes interest) Consequential/ indirect loss Not availableConsequential loss – up to $3k Non-financial lossNo compensation available for pain and suffering Non-financial loss – up to $3k Time limitsWithin 6 yearsWithin 6 years or within 2 years of receiving final “IDR response” (as defined)

6. Some key features of “old” and “new” Terms of Reference - process Complaints received pre 1 January 2010 Complaints received post 1 January 2010 Time allowed for IDR complaint 45 days in most cases OutcomeAdjudicator or Ombudsman issues final decision In most cases, a Panel Case Manager issues Recommendation If appealed, Ombudsman or Panel issues Determination ReviewMatter can return to decision maker(s) on certain procedural fairness grounds Recommendations can be appealed to a final Determination by either party

7. Client engagement “Know your client” “Know your product” Formulating advice Delivery of advice Implementation of advice Reviews Key stages in adviser-client relationship

8. AFSL liability issues: advisers acting without knowledge/approval of licensee When investments are frozen Causation and loss The future Recent decisions of note At FOS Other issues

9. www.fos.org.au (with search facility for determinations) www.wesmcmaster.com Further resources