The lack of a long-stop on complaints against financial advisers could be considered an “abuse of power” by the regulator, Apfa argues as it makes its case to the FCA.
In the FCA’s 2014/15 business plan, published in March, the regulator said it would consider the case for a 15-year long stop on complaints to the Financial Ombudsman Service.
Apfa has now submitted its case for a time limit on complaints to the FCA in writing, ahead of talks later this month.
In its submission, the trade body argues that carrying liabilities into retirement places an “unnecessarily harsh burden” on advisers.
Apfa says: “One in six people over the age of 80 have dementia. Most people would recognise that the majority of over 80s would no longer be capable of dealing with a complaint, and in any event should not be expected to have to. Some might argue therefore that subjecting individuals to such treatment is an abuse of power by the regulator.”
In addition, Apfa argues the lack of a long-stop prevents investment and innovation in the advice market, thereby undermining the FCA’s objective to promote competition.
It says legacy liabilities can reduce the value of a company by up to 50 per cent.
The trade body also argues concerns over liabilities is driving the growth of non-advised services, which have less protection for consumers and can be less transparent over costs.
And it points to the fact the Pensions Ombudsman has a 15-year time limit on complaints, while a number of EU countries also impose time limits on complaints.
Apfa director general Chris Hannant says: “When we meet with the FCA we will discuss next steps, and whether there is an opportunity for individual advice firms to contribute to the discussion and make their case.”