New monetary limits for the Financial Industry Complaints Service (FICS) must be raised in line with other external dispute schemes, according to Australian Securities and Investments Commission (ASIC) Chairman Tony D’Aloisio.

Speaking after FICS lifted its monetary limits to $150,000 for non-life complaints, Mr D’Aloisio says the bar has not been raised high enough to protect investors.

FICS curbed original plans to nearly double the sector’s monetary limits for non-life complaints, opting instead for a more modest increase after industry concerns over rising costs of professional indemnity (PI) cover.

Under new ASIC rules, all financial planners must have PI insurance by July next year, starting at $2 million in PI cover for planners earning $2 million in revenue.

But Mr D’Aloisio says investors must be given precedence, and is urging FICS to lift its monetary limits to $280,000 to match other external dispute resolution (EDR) schemes such as the Insurance Ombudsman and the Banking and Financial Services Ombudsman.

“Let me make the point here that when we speak of EDR we are dealing with investors who have rights,” he said. “EDR is the alternative to court proceedings for the financial services provider. The trade-off, in my view, for the expense of court proceedings is the monetary limit on claims.

“If the monetary limit is too low or the EDR process is not effective, it will leave the regulator to examine other options and such limitations will further promote more costly class actions.”