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Advisers call for FOS staff to have greater experience and qualifications

IFAs have called for Financial Ombudsman Service adjudicators to have industry experience and minimum industry qualifications, in a survey by PanaceaIFA.com.

The survey shows nearly 99 per cent of advisers surveyed agreed with the call with 92 per cent saying the Ombudsman did not have a solid understanding of the issues it considers.

PanaceaIFA chief executive Derek Bradley (pictured) says: “The Personal Investment Authority Ombudsman operated to industry qualification levels but the FOS, despite being advised to, does not. Competent staff are vital and would help improve the service for customers and advisers.”

A FOS spokesman says: “Staff are recruited on the basis of a range of criteria including, as appropriate, specialist qualifications and experience. However, qualifications and financial industry experience alone do not necessarily make someone a good adjudicator, staff also need to be able to investigate and resolve complaints fairly and impartially.”

PanaceaIFA surveyed 302 of its members, 90 per cent of whom thought the lack of a long-stop was “unreasonable and unfair”. The results have been passed to Treasury select committee member Mark Garnier who, along with the rest of the committee is working on a report into the RDR.

In March FSA chief executive Hector Sants told the TSC the FSA would be willing to revisit the long-stop issue if the committee recommends it should. The report is expected next month.

Garnier says: “Unofficially my colleagues on the committee were pleased to hear Sants make his comments. It is an interesting survey and its good to know how advisers feel about this as we put our report together.”

The survey says 90 of respondents said the FOS rules place IFAs at a disadvantage from the outset of the adjudication process with 82 per cent saying the Ombudsman’s decisions are generally unfair and 64 per cent saying they had faced manufactured accusations from people attempting to gain compensation.

Just 5 per cent voted to keep the status quo which sees the defending firm paying case fees after three uncharged cases a year regardless of the outcome.

It says 97 per cent of advisers want complainants to produce relevant tangible evidence supporting their claim to an institution like the small claims court before it can be considered by the FOS.

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Comments

There are 17 comments at the moment, we would love to hear your opinion too.

  1. David Trenner - Intelligent Pensions 27th April 2011 at 9:20 am

    Is this news? Qualified advisers will always earn more than box checkers working for FOS, so why would anyone qualified work for FOS?

  2. Increasingly Frustrated Adviser 27th April 2011 at 9:36 am

    I think you are missing the point David. What we need is better qualified adjudicators, requiring level 4 qualifications. Of course, they will then demand higher salaries, so all we need do is put up the levy a little more to….oh!!

  3. 302 of its members- now thats a survey. Better than the three Australian firms used by the FSA to justify culling 30% of advisers and £1.7b to £3.10b RDR costs!

  4. Better still what we need is accountability to the courts. In law the judge and lawyers are not experts but they use expert witnesses to advise where necessary. If there was a right of appeal to the courts FOS would overnight get up to speed because they would know their standards would be subject to judicial scrutiny. Costs would not increase because very few cases would run to appeal and if they did then the appellant would pay.

  5. And what will the TSC do if the result of the FSA’s revisitation of the issue of the longstop is that it sees no reason to change its stance (the outcome on which I’d be prepared to bet good money)? More to the point, what CAN it do?

    As I understand the situation, the answer is nothing, for the simple reason that neither the TSC or any other body has any power to direct the FSA to do anything it doesn’t want to.

    Hence the urgent need for an Independent Regulatory Oversight Committee with absolute power of veto over anything that the FSA does or proposes doing. The creation of such a body has to be at the top of AIFA’s new agenda.

  6. “FSA would be willing to revisit the long-stop issue if the committee recommends it should” – On past performance they’ll revisit it when asked and still say, “No!” More weasle words from HS?

  7. Wonder what the result would be if you asked the public rather than the industry the same question?

  8. Gerry, the public will have their own list of grievances too, no doubt with good reason. At the moment the voices of the various consumer interest groups within regulation fight that corner only too well and ignore the uncomfortable facts this survey throws up.

    The point is the FOS should be fair and reasonable and investigate complaints on the basis of evidence available and/ or the balance of probability. Many think this is not what is happening.

  9. David Trenner, the “box checkers” at the FOS are by no means low paid admin types. The FOS employs dozens if not hundreds of contractors through recruitment agencies on daily rates from £200- £350.(£50k – £90k-pa) Thats top class money for checking boxes, no liability and normal business hours. Its a scandal, as normal salaries for this mundane work would command no more than £20k pa. When can I start???

  10. In the last FOS Annual Report, only 65% of consumers thought that the FOS were unbiased.

    It cannot just be moaning advisers – the response mirrors my own experiences and those of every adviser I have spoken to.

    As Walter Merricks noted, “the FOS is a strange creature”. One that perhaps should be put down and replaced with a more robust and unbiased version.

  11. Increasingly Frustrated Advisor 28th April 2011 at 9:25 am

    Shaks, sorry but have to correct you on your figures. Out of interest I yesterday contacted the FOS to see if I could get a job with them(via an agency). Starting salary quoted was under 24k. To work in Canary Wharf. Thats not a good salary. I am the first to beat down FOS & FSA but fairs fair.

  12. Wow what a great survey the results are amazing.

    Give us a break please, even if we replace the FOS then the new regime will be hated its ‘us against them’.

    Get your paperwork in order, sell the correct policies then it won’t matter will it.

  13. Get your paperwork in order, sell the correct policies then it won’t matter will it.

    Wring again sterto

  14. I would put a plea in for teh FOS. They do a relatively good job in difficult circumstances. I have seen them get things wrong and dismiss acceptable Industry practice becasue of a a lack of understanding of the issues.

    It is the whole concept of the complaints system that is wrong and not fit for purpose. How stupid is it for the Industry to have agreed to this. The system does not serve either party. It does not work for clients as most IFAs cannot follow the TCF rules on complaints becasue to admit a claim breaches a warranty on the PI policy, which if it is a serious claim is not in the claimants interest.

    The Ombudsman service should be restricted to service issues and there should be some different mechanism used for suitability issues. My experience is that clients do not have the knowledge to deal with suitability claims on their own.

    There is a lot of IFAs helping clients bring spurious suitability claims in an effort to win fees or business. Those doing so should be more responsible and should also check with their PI Insurers who may say that this type of activity is not covered if they get it wrong.

    Having said that there is still a lot of bad advice to clear up from the 5 years post FSMA and before the FSA got a grip.

  15. Most of the contractors are through PWC and other large accountancy firms and the day rate paid is accurate. A very good day pay for file checking!

  16. Simon Mansell 2nd May 2011 at 3:54 pm

    In 2007 Walter Merricks (when chief ombudsman) claimed on BBC1’s Watchdog programme that one in five CI policies is invalid for non disclosure. In other 20% of all CI policies! This is the same buying public that makes claims to the Financial Ombudsman. I’m affraid if your do not subject the buying public to the rules of evidence then you are guilty of conspiracy to defraud the financial services community.

    http://www.moneymarketing.co.uk/analysis/critical-calls-flooding-in-after-tv-outburst/141088.article

  17. Incompetent Regulators Awards Team 4th May 2011 at 9:37 am

    FOS is a complaints machinary that wants as many complaints as possible to create fees and nothing else. I don’t believe that we need an army of what was up to 1000 staff processing 100,000 annual complaints mostly which are try ons. If we introduce a £250 fee to the complainant then 90% would disappear and we would have a more realistic picture of 1) true complaints 2) we would need less FOS staff which means they could recruit those with the relevant qualifications and experience and not monkeys.

    The FOS is a Leviathan Ambulance Chaser as it stands.

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