Merging the financial sector's largest disputes boards into one super-service should improve dispute resolution and efficiency, Australian Securities and Investments Commission (ASIC) Chairman Tony D'Aloisio says.

A planned merger between the Insurance Ombudsman Service (IOS), the Banking and Financial Services Ombudsman (BFSO) and the Financial Industry Complaints Service (FICS) received the approval of the ASIC Chairman, who says the merger is an important step.

IOS, FICS and BFSO hold a total of about 10,200 hearings and receive more than 121,000 phone calls a year, accounting for 90% of the sector's external dispute resolution (EDR) workload.

In his first remarks since passing the 100-day mark as ASIC Chairman, Mr D'Aloisio says the industry's eight EDRs are operating quite well, and merging three of the largest would have benefits for consumers.

"We think it will reduce consumer confusion. It will help to create a level playing field and no doubt over time will achieve economies of scale.

"One of the challenges is going to be to combine the operations, but at the same time to not lose the specialist knowledge that has been built up."

Mr D'Aloisio says the merger will need to deal with convergence issues while incorporating lessons from the collapse of Westpoint.

He also suggests raising professional indemnity insurance levels across the industry to bridge the gap between insured cover and liability damages.

Mr D'Aloisio, speaking at the IOS annual conference in Melbourne, refused to be drawn on Federal Labor plans to merge ASIC with the Australian Prudential Regulation Authority, describing it as a political matter.