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Cat among watchdog’s pigeons

Trust a judge to set a cat among the ombudsman’s pigeons. Two advisers taken to court by theFOS over non-payment of fees have won the day and do nothave to pay because the complaints were not upheld.

The total sum for four case fees is £1,440, which will not now pass to the FOS. Unsurprisingly, the FOS is appealing and must be hoping the case will be fast-tracked to the Court of Appeal.

If the ruling is confirmed, the ombudsman system of funding will face a radical overhaul. Something that advisers have regarded as a fundamental unfairness at the heart ofthe ombudsman system mayhave to be removed.

We have to say well done tothe advisers – Brian and Dolly Pickering – for standing firm.

The question now has to be whether other advisers shouldbe paying case fees to the FOS. Several lawyers who represent advisers say they should notpay up for cases that they win until the matter is cleared up.We would like to hear the views from the FOS and the FSA onthe matter in the meantime.

We also think the FOS woulddo well to say how many cases it deems vexatious in a year – those in which the adviser does not have to pay up because the original complaint is judgedso unreasonable by the FOS.

Whatever happens, uncertainty now surrounds the ombudsman process. Our preferred route would be the ombudsman to accept that it needs to find a different way to charge. We find it difficult to see why consumers should not pay a small bond before they take a complaint.

The industry should accept that some advisers either deliberately or mistakenly find themselves on the end of legitimate complaints.

But some in the media have encouraged an atmosphere where some people have become professional complainers. Some are standing up for their rights and that is fine. Others are simply taking what they can get regardless of the truth.

For that reason, we think that the ombudsman system should be modernised and we cannotsee what better time to do itthan now.


IFP hires Gazzard as operations director

The Institute of Financial Planning has appointed Steve Gazzard as operations director. Gazzard will take up the role on February 26. He joins from Fidelity FundsNetwork and brings over 20 years of industry experience, having worked at Scottish Equitable, Prudential, Fleming Save and Prosper and Egg. In January 2006, he joined FundsNetwork as business operations […]

Govt retreats on parts of Rock bill

The Government retreated on parts of the bill to nationalise Northern Rock in the House of Lords last night.The Government was defeated yesterday when the Lords voted for an independent audit of the bank’s accounts within three months, followed by annual checks.The Lords also agreed the stricken bank should be subject to regular assessments by […]

McPhail says ‘bed and Sipp’ to maximise tax relief

Advisers should encourage clients to claim 22 per cent tax relief on pensions before it falls to 20 per cent from April 6, says Hargreaves Lansdown.Head of pensions research Tom McPhail says a client considering investing £10,000 in a pension could be around £1,800 better off after 30 years if they make the contribution in […]

US banks may be set for mortgage retreat in UK

Network Data chief executive Richard Griffiths says there is a 50/50 chance that all US investment banks will with-draw their UK mortgage arms due to market conditions.Griffiths says the market should “watch this space” with regard to the remaining US investment banks in the UK mortgage market.He says: “I think if other players do go […]

Time for a new approach to asset allocation

Trevor Greetham, RLAM’s head of multi asset, introduces the recentlylaunched RL GMAPs. Asset allocation has become an increasingly difficult challenge for investors and advisers in the years since the financial crisis. Sometimes violent price swings in stock and commodity markets coupled with the collapse in the rate of interest on bonds have made it harder […]


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