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Claim is the spur

This really cannot go on. Last week, for the third or fourth week in a row, I got a set of emails from readers of this column telling me how much they agreed with my comments.

In this specific instance, it may have something to do with the fact that my remarks were about Gordon Brown. I wrote that he would almost certainly lose the next general election – and deserved to.

But in earlier weeks, approving noises also came for my suggestion that, in the current climate, asking mortgage brokers to show empathy for the actions of lenders might not be one of the sensible rallying calls on the part of packagers.

I am starting to conclude that either I have changed in the past 10 years since I started writing a column in the trade press or IFAs have, perhaps a bit of both. So let me get up everyone’s noses again by saying that I have long had a soft spot for compensation claim firms.

The thought resurfaced last week when I read the headline in which Brunel Franklin, a compensation claim firm, attacked the Hunt report on the FOS for suggesting a crackdown on the sector. Managing director Anthony Sultan believes that Lord Hunt has a “vendetta” against his industry.

Surely not, was my first thought – until I noticed the headline accompanying this story used the derogatory term “chaser” to describe Brunel Franklin.

The irony, of course, is that this distaste for so-called claim-chasers manages to unite not just lord Hunt but IFAs and the Financial Ombudsman Service.

The industry hates claim firms with a vengeance and it is easy to understand why. Unlike a traditional complainant, who writes a letter to an IFA, is fobbed off and goes away, almost certainly never to be seen again, a claim firm will persists with a claim.

Even worse, the claim firm will know every trick in the IFA and providers’ book. It will know what the grounds for a successful complaint are, what is likely to win an argument with the FOS and what is not, what kinds of evidence to submit and not. If the complaint firm does its job properly, it stands a far better chance of winning a case before the FOS.

But equally, a good firm will be able to save the FOS a lot of time by making the right arguments and not getting sidetracked, marshalling evidence effectively and generally speeding up the process.

In effect, as is sometimes said in cases where people wish to represent themselves in a High Court: “If you want an idiot as your lawyer, hire yourself.”

In such cases, you would expect the FOS to be keen supporters of a good complaint firm. Sure, they take a potentially big slice of a complainant’s total compensation package but that is sometimes a small price to pay for a well-marshalled set of arguments that cut through all the whining and whingeing so many complainants (and defendants) are prone to and it offers the potential to save the FOS time.

In fact, the FOS dislike “chasers” too. It repeatedly insists that the services provided by complaint firms are available free from fully qualified assessors who are well versed in the needs of potential complainants and know what questions to ask and what to look for when they get a letter from someone who, say, was missold a product 10 or 15 years ago.

The reality, of course, is that nothing is ever so simple. Sure, there are good, well-qualified staff at the FOS capable of making impeccably sound judgements.

Equally, there are absolute dunces working there and the reality, as any journalist will tell you, is that it is sometimes necessary for a claimant to fight incredibly hard for a complaint to be upheld.

In several cases that have been written about before, it required the intervention of the personal finance journalist as the complainant’s unofficial adviser before justice was won.

So the simplistic argument that all complaint firms are bad and the FOS is “good” is a myth.

Meanwhile, IFAs who find themselves complaining because the Financial Ombudsman Service appears to wobble all over the place, with judgements which appear to contradict themselves on a case-bycase basis, need to ask themselves why that is.

Does all this mean that complaint-handling firms are universally good? Of course not. There are some real scuzzy ones around, just as there are terrible IFAs. Indeed, some work for the same firms.

There is a need for much tighter regulation of the sector, which would help to reduce (if not totally prevent) situations where complainants and their representatives are encouraged to lie in order to win compensation. Training and qualifications should also be mandatory.

But the principle of an expert who can guide people through the process should not be rejected simply because a few IFAs do not like the thought of someone more intelligent than them arguing the toss in front of the FOS.

Nic Cicutti can be contacted at


Annuities fail flexibility test

My many years of experience in advising individual and corporate clients about annuities and drawdown, advising insurance companies about product development and speaking with the Government and regulators leaves me in no doubt that drawdown will continue to replace annuities as the preferred option for many middle-Britain investors. That is, provided that clients get the correct advice and the industry continues to develop innovative products like variable annuities.

Exceptions to the rule

Despite the recent stockmarket turmoil, there are still some very good buying opportunities in the financial sector. Two of the best managers in the industry, Guy de Blonay and Philip Gibbs (no relation), manage excellent funds – New Star global financials and Jupiter financial opportunities respectively.


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