The Financial Planning Association (FPA) has opened a rift with the sector's main complaints body after accusing the financial services ombudsman of lacking transparency and proposing an arbitrary increase in monetary limits.

FPA CEO Jo-Anne Bloch has slammed changes mooted by the Financial Industry Complaints Service (FICS), which is planning to increase the maximum complaint ceiling from $100,000 to $280,000 by 2010.

She says the increase in monetary limits is too high and would force many smaller businesses to close down due to higher PI insurance costs.

"We want to understand the basis upon why they want to increase and why they chose the numbers they have chosen," she said. "We are saying if you have to increase above the current level, show us who and what are the complaints you are going to deal with."

Following the recent Westpoint collapse and pressure from the Australian Securities and Investments Commission (ASIC), FICS has previously stated the monetary limit must be raised to better align its scheme with other external dispute resolution bodies. FICS has also said it needs to accommodate "the size of complaints as the value of life insurance, super and investments goes up".

But Ms Bloch says the average FICS claim, excluding Westpoint, is only $24,000 and the monetary limit has not changed since 1991. Adjusting for inflation alone would take the limit to $144,000.

Ms Bloch says the limit could be raised for "special circumstances" such as a corporate collapse.

"In the normal course of events the $100,000 limit is fine, but if another Westpoint happens and if the complaint average was, say, $190,000 we should be able to look at those.

"But we don't want them to go for $190,000 all year round because we would have to get PI cover all year round to match that amount."

Ms Bloch has also criticised the FICS complaint process as biased in favour of the consumer and lacking transparency.

FICS rulings are made public, but Ms Bloch wants more information on the reasons behind each decision. She says the FPA is also concerned work done by ASIC on PI cover for licensees hasn't been evaluated by FICS.

"FICS has tried to position us as a noisy few that are disgruntled with decisions from FICS," she said. "That is not the case; there is widespread concern there will be a cost increase for licensees without any justification."