Activity Report Ombudsman for 2020
Activity report 2020
As part of the preparations for the foundation of a conciliation organ or so called ombudsman office, as laid down in the new Financial Services Act (‘FinSA’) and Financial Institutions Act (‘FinLA’) of 01-01-2020 had already been completed in the previous year, we concentrated our activities in the first half of 2020 primarily on marketing activities, as well as optimization of the affiliation procedure as provided for by law, so that a minimum targeted number of at least 300 affiliations of financial service providers could be ensured.
In addition, during this time period we agreed to an official collaboration with four regional conciliation organs, one of which is present in Ticino and another one is present in the French-speaking part of Switzerland. As a result, we are well represented in all language regions of Switzerland and we can provide for professional mediation procedures in the three official languages of the country, as well as in English.
In addition, we started and concluded successfully negotiations with the Zurich tax authorities that lead to our current status of being tax exempted.
After a formal application for authorization by the ombudsman office was submitted to the Federal Department of Finance (‘FDF’) on October 17, 2019, we officially got authorized by the FDF on June 24, 2020, as one of the first ombudsman offices under FinSA (Section 84 paragraph 1). This marked the beginning of a six month transition period as provided for under FinSA and FinLA in which all financial service providers as defined by FinSA and FinLA had to affiliate themselves with a legally authorized and FDF recognized ombudsman office.
Our focus for the second half of the year was therefore to optimize the number of affiliations of financial service providers with our ombudsman office. As of December 31, 2020, we have successfully obtained 798 registrations from financial service providers. Behind these registered entities are more than 6,500 individuals active; financial advisors, banking consultants, fiduciaries, financial planners, asset managers, fund managers and insurance advisors, all providing financial services under the laws of FinSA and FinLA. Our initial target of registering at least 300 financial service providers was exceeded by more than double the amount.
Resources of the ombudsman office were heavily constrained during this phase; however, registrations were always completed on time and to the complete satisfaction of our affiliated financial service providers.
As an ombudsman office under FinSA, we retain of great importance to provide for absolute transparency in our work procedures as well as to apply equal treatment of our affiliated financial service providers right from the beginning and at all times. The Financial Services Act explicitely states that the costs of an ombudsman office are to be born by its affiliated financial service providers. In view of the above we have decided to charge an annual fee regardless of the actual date of registration of the financial service provider. It was the appropriate way to ensure that the expenses incurred by the ombudsman office were to be distributed evenly. Since financial service providers with fewer consultants generally incur fewer expenses, in addition we applied a fee model based on the number of financial consultants having client contact. In return, however, all financial service providers affiliated in a given calendar year can benefit from any surplus in the number of affiliations realized by us in the following year.
As far as transparency is concerned, we are proud to be the only ombudsman office that publishes the names of its affiliated financial service providers on our website. This is of great use for clients of financial service providers when they need to determine which ombudsman office is their point of reference; simply by checking online which financial institutions are affiliated with our ombudsman office they know who to turn to for a professional mediation procedure as defined under the applicable financial law. We would highly recommend this information to be transparent to all financial services clients, standard to be provided by all conciliation organs and ombudsman offices, thereby becoming market practise.
Inquiries from financial clients and mediations
The number of inquiries to the ombudsman’s office so far has been limited due to the fact that
- a large number of financial service providers did not register themselves until the end of the year, in view of the FinSA deadline for affiliation of December 24, 2020. As a result, many financial service providers are currently still in the process of informing their clients about its affiliation with our ombudsman office and it will still take some time before that task has been completed by all financial service providers.
- Of a total of eight requests for mediation submitted to the ombudsman office in 2020, the office declared itself not entitled to deal with six of them. As far as the remaining two inquiries are concerned, financial clients were referred to their financial service provider for further clarification, as no written complaint had yet been filed. Due to the small number of concrete cases, more detailed information on these inquiries are for reasons of confidentiality not disclosed in this first activity report.
Ombudsstelle Finanzdienstleister (OFD)
Roland Gassmann, Ombudsman Zurich, June 2021