Financial services licensees have lashed out at ASIC's proposal to lift the current external dispute resolution (EDR) claim threshold from $150,000 to $280,000.
"Our recent consultation on our EDR scheme policy elicited quite colourful and polarised responses," ASIC deputy chairman Jeremy Cooper said.
"Clearly, one of the most contentious issues is our proposal to increase the monetary limit for investment complaints that can be heard by the Financial Ombudsman Service (FOS) to $280,000."
Consumers were likely to be suffering greater losses and there was likely to be an increase in claims brought to EDR schemes, Cooper said.
"So there is argument that this is precisely when we need EDR schemes to be able to hear these claims. Consumers might also be less able to fund the costs of litigation."
ASIC was aiming to continue working with the industry to understand the implications for an increase in monetary limits and the hardening insurance cycle, Cooper said.
"However, our aim is still to bring the limits up to an appropriate level," he said.
A claim threshold increase to $280,000 would be grossly unfair, particularly for smaller financial planning firms, Boutique Financial Planning Principals Group (BFPPG) executive member Tony Gillett said.
"You've got this mob [ASIC] who are just making decisions and we don't have a choice because we must belong to an industry complaints scheme," Gillett told InvestorDaily.
"Now $280,000 is a lot of money - you're not talking minor claims here - and it thereby removes from us our rights to have our day in court," he said.
