Advisers are concerned about the impact of the 90 per cent increase in the Financial Ombudsman Service’s total budget but are broadly supportive of plans to reform case fees.
In its plan and budget for 2013/14, published last week, the FOS outlined plans to increase its total budget from £147.2m forecast for 2012/13 to £280.1m for 2013/14.
The budget includes levies on financial services firms, those who hold consumer credit licences and the amount raised from case fees. Individual firm levies will depend on which FSA fee block they are in.
It is hiking the total amount it levies firms from £17.7m to £23m.
Following a consultation last year, the FOS confirmed plans to increase the number of free cases a firm is allowed in a year from three to 25. It also plans to increase its standard case fee from £500 to £550.
The FOS is planning to introduce a new “group account” structure for case fees for the four biggest banking groups that together account for 60 per cent of its caseload. Group account fees would be set in advance, with a quarterly fee based on the proportion of complaints from each group. Fees would then be adjusted at the end of the year if actual complaint figures were markedly different.
Payment protection insurance complaints will continue to incur a supplementary £350 case fee.
Highclere Financial Services partner Alan Lakey says: “Case fees should be geared around the firms that cause the FOS the most work. But the increase in the budget is significant and the sad truth of it is bodies like the FOS are not as careful with spending other peoples’ money as they would be if it was their own.”
Sovereign IFA director Mark Hibbitt says: “I am worried about how much our fees will have to increase to pay for the higher FOS budget.”