Good advisers have nothing to fear from the Financial Ombudsman Service, says chief executive Caroline Wayman.
Speaking to Money Marketing, Wayman says the view that advisers should be worried about the FOS is the biggest myth about the organisation she hears from advisers.
She says: “Of course we see a whole range of advice from different firms, but if you’ve given good advice you have nothing to fear from the ombudsman. I want to understand where those concerns come from and highlight examples of good practice.
“We are human beings and I would urge advisers to come and talk to us if they have concerns.”
One area where the industry has been fearful of the FOS’ approach is insistent clients. Whether or not advisers should transact requests that go against their recommendations has divided the industry in recent months.
After repeated calls for regulatory clarity, the FCA published a factsheet on insistent clients in June.
Asked whether there is a need for further clarity from the FOS, Wayman says: “I thought the FCA’s factsheet was clear and would urge people to read that first.
“There aren’t special rules about insistent clients, and the more you think there is a special box of guidance for that, that may add to the concern rather than help.
“The FCA has done a good job of saying here’s some principles and that is their role – we are not the regulator.
“I don’t have any additional wisdom. As long as the advice is suitable, the customer is treated fairly, the information is clear and records are kept even if there is no transaction, you won’t go wrong with us.”
But Wayman says the FOS is open to sharing its work and may publish some case studies on insistent clients in future.
Another area where some have expressed concerned about the FOS’ approach is suitability letters.
In November, the FCA said suitability letters are too focused on defending potential complaints and not enough on client engagement. But advisers argued they have to include certain information to defend any potential complaints to the FOS.
Wayman says: “We definitely agree with the FCA that suitability letters should be written for the consumer first. The main objective is to set out clearly, in ways the consumer can understand, what the recommendations are. Adding more and more information is likely to move you further away from that objective.
“People often crave an absolute rule such as ‘four pages is good’, but as ever it is what is fit for the circumstances.
“If you start with doing right by the customer, giving good advice and setting it out clearly, you have very little reason to think that anybody is going to come along later and say that was wrong.
“Certainly I wouldn’t want people to be thinking ‘I need to throw that in, because the ombudsman might think x or y’.”