The scaffolder injured a tendon in his ankle in 2023 and was unable to work. (File image) Photo: 123rf
A scaffolder has been paid out $17,500 by his former financial adviser when it was discovered he did not have the accident insurance in place that he thought he did.
The case was dealt with by Financial Services Complaints Ltd, an ombudsman service that handles complaints that cannot be resolved between customers and their providers.
FSCL said in its case note that the man had taken out life insurance through an adviser some years ago.
In 2022, he spoke to the adviser about additional cover.
The adviser suggested he take out additional accident cover and shift his insurance to a new insurer, which he did.
When he injured a tendon in his ankle in 2023 and was unable to work, he thought he could use the cover to book surgery in a private hospital.
But, FSCL said, when he talked to his adviser he discovered no cover had been put in place and he had to wait a year for surgery in the public system.
He took a complaint to FSCL, helped by a new adviser.
He said the former adviser had not explained the insurance he had in place.
"[He] also said that when he first raised the complaint with his adviser, they told him that you couldn't get accident cover as a scaffolder, with insurer B.
"However, [his] new adviser said this was incorrect and scaffolders could obtain accident cover with insurer B. In any event, if [he] was unable to get accident cover with insurer B, the new adviser argued that it would have been better to keep [him] with the original insurer (insurer A), and increase/change benefits.
"In other words, it was not clear why moving to a new insurer was in [his] best interests."
The scaffolder said he was also encouraged not to complain because it would be expensive for him to engage a lawyer.
That was an inaccurate statement because people can complain to FSCL and other resolution services free of charge.
FSCL started to investigate and the adviser contacted his professional indemnity insurer, who engaged a lawyer.
The lawyer offered a payment of $17,500 to settle, roughly made up of $15,000 that the scaffolder might have been able to claim if he had accident cover in place, taking into account the premiums he would have paid, and $2500 as compensation for stress.
FSCL said that was fair and reasonable and the complaint was settled.
"We remained concerned about the allegation that the adviser had attempted to dissuade [him] from complaining. The adviser said he never made this statement ... and there was no written evidence that he made the statement. Also, because we never fully investigated the complaint, we did not make any findings on the allegation.
"Financial advisers have obligations under the [Financial Markets Conduct] Act and Regulations, the conditions of financial advice provider licences they operate under, and under FSCL's terms of reference, to provide 'complaints disclosure' to clients upon receiving a complaint. This must include details of the adviser's internal complaints process, and details of the adviser's independent dispute resolution service, including a statement that using a dispute resolution service is free for the client."
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