Investments, Life Insurance and Superannuation Ombudsman Alison Maynard has welcomed a Federal Government decision to examine the feasibility of a statutory compensation scheme for consumers.

But she wants compensation made available “to all Australians who purchase a financial product or service” and not just investors.

“The current requirement that Australian financial services (AFS) licensees hold professional indemnity (PI) insurance does not provide consumers with an assurance that they will be duly compensated,” she said in a statement. “A PI policy is not an adequate compensation mechanism.”

Ms Maynard says the Financial Ombudsman Service supports an “industry-based, industry-funded scheme that would offer last-resort compensation to retail clients of AFS licensees”. 

“We have developed what we believe is a very good model of a compensation scheme based on our experience in resolving disputes, and on the UK model of a compensation scheme,” she said.