Frequently Asked Questions
Go to FDR Information
Go to FDR Enquiries
Go to FDR Glossary
What is FDR?
FDR stands for Financial Dispute Resolution. FDR is the financial sector dispute resolution scheme established by government.
New law changes are about to come into effect in New Zealand requiring people and organisations that provide financial services and advice to the public to be registered. One condition of registration is membership of an external dispute resolution scheme, and FDR is the independent and alternative dispute resolution scheme.
Who can join FDR?
Membership is open to any organisation or individual who provides financial services and/or advice to the public. FDR provides an independent alternative to other schemes that may also be available.
Some financial service providers and advisers will not have to join a dispute resolution scheme however. These include;
- Financial service providers who only deal with wholesale clients,
- Financial advisers who are employed by a registered financial service provider, and
- Financial advisers who are nominated representatives of a Qualifying Financial Entity(QFE).
For more information about registration, see the Financial Service Providers Register (FSPR) website. For more information on which financial advisers have to join a dispute resolution scheme see the Securities Commission website FAQ Pages and Information for Financial Advisers or the FSPR FAQ page.
When can I join?
FDR is open for registrations of interest from financial service providers and advisers now. Being a member of a dispute resolution scheme is required as part of the registration process, so people and organisations that become members of FDR will have already completed one of the critical elements of their registration process. You can register your interest or make any other enquiries about FDR here.
How do I join?
You can register your interest with FDR now. Either supply your contact details via email or submit this form providing your contact details. FDR will contact you within five working days to discuss your membership enquiry.
How much will it cost?
The FDR scheme will have an annual membership fee, paid quarterly in advance. Complaint fees will be additional, but will only be charged when a complaint is accepted by FDR – if there are no complaints against a scheme member, there are no costs other than the membership fee.
The scheme is free for consumers to use.
FDR's fees are currently being worked through by government, but will be in line with other schemes' charges.
How are complaints handled?
Before a complaint is accepted by FDR there are three conditions that must be met.
- The financial service provider or adviser being complained about must be a member of the FDR scheme
- The event or actions in dispute must have happened after the establishment of FDR (1 October 2010)
- The complaint must have already been made to the scheme member, and the scheme member given an opportunity to resolve it.
Consumers will be able to contact FDR via phone, fax, email, postal mail or through the FDR website. Once it has been established that the complaint can be handled by FDR (by using the criteria above) the formal FDR dispute resolution process begins.
What can complaints be about?
Coverage
Consumers can make complaints regarding the services and advice they have received from a scheme member. They can't complain about a scheme member's general policies and practises or fees.
Compensation
There is a compensation cap of $200,000. A complaint can be taken to FDR that involves more than $200,000, but the maximum compensation available will still be $200,000.
Consumers
Any consumer who has received or been denied access to financial services or advice can use the FDR service. Consumers are defined as individuals or organisations with 19 or fewer full-time-equivalent employees (however FDR can also accept complaints from larger organisations at its discretion).
The FDR Process
FDR provides a three-level complaint process, which aims to resolve disputes efficiently and thoroughly. Disputes that can't be resolved move through the dispute levels. Scheme members are charged a higher complaint resolution fee at each level.
If an agreement between the parties cannot be reached, FDR will issue a formal decision. If a complainant is satisfied with the outcome of the formal decision it becomes binding on the scheme member.
Complainants who are still not happy with the outcome have the option of taking their dispute through other channels such as the Courts or the Disputes Tribunal.
The Complaint Process
Registration – the complaint is assessed for jurisdiction and deadlock to see if it can be considered by FDR. The complaint must have already been made to the scheme member, and the scheme member given an opportunity to resolve it. The complaint must also be about an event that happened on or after 1 October, 2010 (the date from which FDR can accept complaints).
Level 1 – Complaint information is gathered and confirmed, and then shared with all parties to see if there is an opportunity for early settlement. If there is no resolution the dispute moves to Level 2.
Level 2 – FDR gathers more information from all parties and assesses the dispute. At this level FDR aims to help the parties reach an agreement themselves. FDR can arrange a meeting between the parties – either face-to-face or via video or telephone conference – and mediate the discussion. If the parties can’t reach an agreement or a meeting doesn't take place, FDR takes all of the information and recommends a settlement.
If the parties don’t agree to the recommended settlement, the dispute moves to Level 3.
Level 3 – FDR issues a final decision. If the complainant agrees with the decision it becomes binding on the scheme member. If the complainant is still not happy with the outcome the complaint is closed and the scheme member has no further obligations. The complainant is still able to take the matter through other channels such as the Courts or the Disputes Tribunal.
How will FDR deal with complex financial disputes?
DRSL has extensive experience in dispute resolution and a network of independent financial sector consultants it will work with on FDR disputes. These include industry representatives and consumer rights specialists, who accurately reflect the market, current best practice and reasonable consumer expectations.
What happens if I want to leave the FDR scheme?
Leaving the FDR scheme is done by simply giving three month's notice, in writing, to the scheme. FDR can still accept consumer complaints about issues that occurred during that period, and will charge for any dispute resolution that arises out of those complaints.
Membership of an external dispute resolution scheme is a requirement of being registered however, so if a scheme member leaves FDR and does not join another scheme, they will no longer be registered and therefore unable to operate as a financial services and advice provider.
I've heard about the 'Reserve Scheme'. What is that?
In some of the early discussion documents regarding the changes to the financial sector and the Financial Service Providers (Registration and Dispute Resolution) Act, the Government's dispute resolution service was called 'the Reserve Scheme'. This is now FDR.
Who is DRSL?
Dispute Resolution Services Ltd (DRSL) is the company implementing and operating the FDR scheme. DRSL is an award-winning, nationwide company with extensive public and private sector experience. It provides the primary dispute resolution service for ACC, and for the telecommunication industry as the scheme provider for the Telecommunication Dispute Resolution service (TDR).
DRSL has been operating since 1999, and covers a range of industry sectors, including complex medical, disability, employment and commercial issues. DRSL is ISO 9001 compliant and has offices in Auckland, Wellington and Christchurch.
For more information about the senior management and board of DRSL, please follow this link.
Where can I find the legislation and other related information?
The Financial Service Providers (Registration and Dispute Resolution) Act 2008. requires financial service providers and advisers to either be registered or applied to be registered by 1 December 2010.This includes the need to be a member of an independent dispute resolution scheme.
The Financial Advisers Act (FAA) 2008 outlines the requirements of financial advisers regarding disclosure, competency and accountability. The full act and associated amendments are below:
Financial Advisers Act 2008 No 91 (as at 28 July 2009), Public Act
Financial Advisers Amendment Act 2009 No 24, Public Act
Financial Service Providers (Pre-Implementation Adjustments) Bill
A Code Committee has also been established. It is responsible for developing and maintaining a Code of Conduct for financial advisers, setting minimum professional standards of competence, knowledge and skill, ethical behaviour and client care, as well as minimum requirements for continuing education and training. A draft copy of the Code can be found on on the Code Committee's consultation web page.
Back to FDR Information