Financial Dispute Resolution Centre to Open Mid-2012; Investor Education Bureau Planned

The government proposes establishing a Financial Dispute Resolution Centre by mid-2012, giving financial consumers “one-stop” mediation for monetary disputes with financial institutions. Financial Services chief K.C. Chan said it will operate as an independent corporate body, funded jointly by the industry and the government.

How will the centre work?

Mediation first, arbitration if that fails — at affordable fees. Consumers with monetary disputes against financial institutions can apply for mediation; unresolved cases can proceed to arbitration. Fees will be set at levels ordinary people can afford. After it opens, nobody needs to sue over a few tens of thousands of dollars.

How will investor education improve?

A new Investor Education Bureau to teach smart money habits. Alongside the centre, the government will set up an Investor Education Bureau to boost financial literacy — so people know what to ask and how to choose before buying financial products. The same applies to MPF funds: if you don’t understand it, ask; if it’s still unclear, don’t buy.

What does this mean for MPF?

Mis-sold funds and fee disputes get another channel. Workers who feel misled by MPF intermediaries or dispute fund charges gain an extra avenue for redress. But prevention beats cure — doing your homework before buying remains the best policy.

To compare charges and returns across MPF funds, visit MPF fund comparison.