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FCA ‘naive’ to dismiss advisers’ FOS concerns

Advisers have slammed claims by FCA technical specialist Rory Percival that differences between the regulator and the Financial Ombudsman Service are a “myth”.

Speaking at an Institute of Chartered Accountants of England and Wales conference this week, Percival said the issue of FOS decisions which go against FCA rules is often raised with the regulator.

But he said: “I am not convinced that the incidence of these differences is as significant as is often made out.

“When I talk to people about cases that have supported that view, the difference isn’t necessarily there. I think messages can get round and people can interpret adjudications to take a wider view.

“There is the potential for the myth to have been built up and I am unconvinced that this is as much an issue in reality as it is in perception.”

Informed Choice executive director Nick Bamford says: “I have seen several instances of FOS decisions which are inconsistent with FCA rules, one of which where the adjudicator failed to understand the rules on unregulated collective investment schemes.

“The FCA should recognise that FOS decisions are made by people without our qualifications and often with little understanding of industry issues.”

Philip J Milton & Company managing director Philip Milton says: “To say this scenario does not exist is naïve. The FCA should have the power to look at questionable FOS decisions.”

Percival also said that shorter and more personalised suitability letters could help advisers defend complaints to the FOS.

Earlier this month, Percival said suitability letters were too long and geared towards defending complaints rather than client engagement.

He said many advisers have since argued they need to include lengthy information because of the FOS.

But he said: “If your letter is personalised to the individual client, that is going to be contemporaneous and personal information that the adjudicator will look at. A lot of adjudicators are getting reports that are generic, however, and in those situations it is easier for them to find in favour of the client.”



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There are 6 comments at the moment, we would love to hear your opinion too.

  1. Perhaps Mr Percival might care to make available to the adviser community a range of sample FactFind scenarios accompanied by what he considers to be satisfactorily concise letters of recommendation. Satisfactory, that is, from the point of view of all parties ~ adviser, client, FCA and FOS. That way, we might be able to glean a better idea of just what we’re supposed to be doing and how. I shan’t be holding my breath.

  2. I do not have any personal experience (thankfully) with FOS but could I suggest that if anyone does have evidence, as has been posted by several on other posts ref the “myth’ blog send this evidence to Mr P. Demonstrate to him where the FOS has ignored the FCA rules in their ruling on a complaint and bring home to him just what the FOS is actually doing. Not what he has been told by their boss what they are doing.

  3. I would also like to see some examples of where FOS have gone against FCA rules and reasons why. This debate is always rolling on, but I have never heard any relevant examples.

  4. Of late the FOS has been busting a gut to improve the quality of staff, unfortunately they are hamstrung by out of date policy and decision trees.

  5. My personal experience of the FOS, the staff are woeful incompetent and inexperienced

  6. Only ever had two cases go to the FOS and both times found in my favor, so must be doing something right.

    We did changed our suitability letters at the start of this year, having attended a FCA work shop so this is not a new concern.

    They suggested that the report should be split in to two parts. The first part should be very client friendly and very simply worded, explaining the events, what happened, what advice, why recommended and costs. The second part of the report is all the complicated warnings and explanations and so on.

    We have asked our clients their views and they like the new reports, but they did admit they where not reading the second part, which is an unintended outcome.

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