View more on these topics

Aifa wants fee on frivolous complainants

Aifa is calling for the Financial Ombudsman Service to charge complainants who bring cases with no merit against advisers.

In its response to the Hunt Review, Aifa says a radical overhaul of the FOS structure, process and charges is needed to make it more transparent, accountable and easier to do business with.

Aifa says the rules allow the FOS to levy a charge against frivolous complainants, but the FOS does not use this opportunity. It is calling for the FOS to introduce joint liability where providers of “toxic” products are held equally liable for negative effects on consumers.

Aifa says the ombudsman should instruct firms on how much compensation to pay, rather than relying on formulaic instructions that are open to abuse.

The submission says as over 90 per cent of complaints are over large companies, a small firms division is needed to protect both firms and consumers.

Aifa director general Chris Cummings says: “The creation of the small firms division allows complaints against smaller firms to be treated individually with due regard to the needs and interests of these firms and their consumers – so allowing for a process that is fair to all.”

Cummings also proposes an increase in the number of “free” cases for advisers. He says: “We are calling for 10 free cases. The case fee can be a significant burden for small firms despite only being a fraction of the Ombudsman’s case load in comparison to that of the banks and insurers. We also feel it is unfair that the FOS charges case fees when the case is found to be outside of FOS jurisdiction.”

Cummings says the FOS should publish information about firms that are most complained about so consumers can make an informed choice.

He says: “We believe that firms with particularly high levels of complaints received and upheld should be named and shamed with the relevant numbers publicised. We need to ensure that consumers understand who they can trust.”

Recommended

Pru shares rise on Chinese whispers

Prudential’s shares received a boost yesterday as reports that China’s Ping An Insurance was looking to buy £7bn of Prudential shares emerged.A Chinese business paper reported that Ping An – 17 per cent of which is owned by HSBC – was close to taking a £7bn stake in the life office which would be equivalent […]

Moncrieff appointed as MD, adviser sales at Clarkson Hill

Clarkson Hill director of strategy and development Bill Moncrieff has been appointed managing director, adviser sales.Moncrieff has been with Clarkson Hill for five years and says a key objective in his new role is to convert the company’s 712m funds under influence into funds under management, primarily through tying up a deal with a platform […]

Leading Edge – April 2017

There is little doubt 2017 will be a year of political uncertainty. Leading Edge is Royal London Asset Management’s regular review of investment markets. This edition explores some of the impacts that this uncertainty is having on investors, from the pitfalls of prediction within UK equity investing to the dangers of opting for convenience over […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment