Press Release - 05 November 2009

Address on 4 November 2009 by Financial Services Ombudsman, Joe Meade to the Financial Planning Standards Board's Council meeting in Dublin

May I welcome you all to Ireland from over 25 countries and no doubt you will gain some insights into our culture but especially about the area of financial planning. Indeed it was my pleasure to host the international conference for Financial Ombudsmen last June in Dublin Castle. We all learn from sharing our experiences with our international colleagues.

I am pleased to address you briefly today as I regard your work should ultimately lighten my work load. Last November I had the honour to present over 500 diplomas and certificates at the Joint III/LIA/ACOI/IBA Graduation Ceremony in University College Dublin and I will be present at next week’s graduation ceremony when 4 more of my staff will graduate but especially my own daughter as well. Last year in my address I stated that no doubt some of them would go on to do the Bachelor of Financial Services Degree Programme.

I compliment the Institute of Bankers, Insurance Institute of Ireland, the Association of Compliance Officers in Ireland, the Irish Brokers Association and the LIA for providing these courses. They aim to ensure that people who operate in the financial services industry have the qualifications required to assist them in operating to the highest ethical and professional standards. I am particularly pleased that Ireland is now a part of the Financial Planning Standards Board through which the Institute of Bankers and LIA are bringing CFP certification to Ireland. Indeed I understand that some 130 people are doing this course initially.

The numbers graduating next week and in the recent past is testament not alone to the success of these courses but the efforts being made by these educational bodies to ensure that they are relevant to current needs and expectations of everyone.

Look at the statutory position in Ireland-Statutory Financial Regulator, Statutory Consumer Protection Code, and Statutory Ombudsmen for Pensions and Financial Services with teeth as well as statutory Minimum Competencies Requirements for staff. How many other countries have this level of statutory requirements and may I say they have made a difference both for the industry and for consumers?

Irrespective of whether it is a requirement of the Financial Regulator to have minimum competencies, appropriate professional courses would have to be provided anyway by the industry as indeed they were over the last 20 years or so. The fact that so many study for exams and attend course tutorials in their spare time is even more reassuring to me as Ombudsman. It is also a truism that in any walk of life acquiring knowledge and keeping up to date with new developments is necessary for the best performance of one's tasks. This is why these certificate and diploma courses are so vitally important to the financial services sector. However, no matter how well qualified anybody is, it is how you exercise your functions that is important. In that regard, common sense is always a necessary part of any business operation and flexibility must also be there to deal with particular circumstances in an even handed manner. As well life does not stand still and we all have to keep up to date with emerging problems and ideas.

You are all conscious of the efforts that have been made by me as Ombudsman, by the Financial Regulator and the industry over the last few years to ensure that consumers are treated in a fair, transparent and impartial manner. Accordingly in the next year or two if any complaints are received by me where the sale of products have been undertaken by people who do not have the necessary competencies then that can be a good ground for upholding a complaint and awarding compensation. The era for catching up is almost over. In short no qualification or necessary competency means no advisory service in reality.

It would be also foolish for industry to try and save costs or not provide study time in these difficult times as ultimately an unprofessional or untrained work force will only cause problems for everyone in future. Why should the financial industry not aim to be the best providers of advice to its clients as this can only be achieved with a dedicated and professional workforce?

As regards my role as Financial Services Ombudsman I am a statutory officer though not a consumer advocate or a consumer champion. As an independent statutory office, established on 1 April 2005, as Financial Services Ombudsman I ensure that unresolved complaints from customers of financial service providers are mediated, investigated and adjudicated on in an impartial and independent manner. I can in addition to rectifying matters make compensation awards up to €250,000 – my findings are binding on both parties subject only to appeal to the High Court. I must deal with matters in private but I publish selected unnamed Case Studies generally every six months to enlighten everyone as to what type of cases I deal with and what lessons can be learned. This enhances the financial services environment for both consumers and providers. My actions to date have caused significant improvements to be effected in the industry; I have made major awards of compensation in individual instances while other consumers also got major refunds when a systemic problem arose.

I am dealing with people as are institutions. That is not an easy task on occasions I can assure you all. Naturally you will not satisfy all of the people all of the time but you strive to have a happy customer as that cannot but be good for business. In an industry where large volumes of transactions take place, where complex products are sold, where investments are falling and where institutions are dealing with human beings, it would be abnormal if some complaints could not be resolved without assistance from me.

Financial Service Providers will, and do make mistakes. Everybody, not just compliance officers, have to play their part in trying to reach a settlement with a customer who has a complaint to make or has made one. Issues not resolved are referred to me and while it must be acknowledged that I only receive a small percentage of complaints relative to the total number of financial transactions undertaken, how these are handled by the Providers is what ultimately matters. That said I have received over 23,000 complaints since April 2005 and about €60m has been refunded to consumers as a result of my work.

Let me emphasise that the era when financial institutions could take advantage of anyone and also not disclose conflicts of interest is over as far as I am concerned. I will not hesitate to award appropriate compensation and publicise such matters. However I know and welcome the fact that your industry is making strenuous efforts to prevent such abuses happening in the future but even one to arise is alas one too many.

This is why I have such regard for your board in Ireland, your work here today at this conference, the work being done in Ireland and worldwide to professionalise and improve standards. I have the highest regard for it.

You cannot rest on your laurels and the odd horror story I disclose will bring criticism on you all but the efforts being made will ensure that these are a rarity I hope.

I wish you all success in your deliberations.