View more on these topics

FOS criticised over DB transfer claim handling

A better way must be found to manage claims against IFAs on defined benefit transfers, as the current settlement process is untenable, experts say.

In the latest edition of Money Marketing’s series of live debates, MM Wired, Delta Financial Management director Jarrod Ellis, O3 Insurance Solutions managing director Jamie Newell and Libertatem director general Garry Heath discussed how advisers can secure the best deals on their professional indemnity insurance.

The panel agreed the current situation where advisers face mounting premiums and are worried about claims against them, while insurers might drop out of the market, is not sustainable.

Heath said: “We are in a situation where the Financial Ombudsman Service does not have the confidence of anybody. It does not have the expertise to deal with large cases or specialist areas like pensions.

“I had a meeting with FCA last week and it said FOS will have a greater injection of expertise. Advisers can follow the FCA rules but claims just arrive at FOS and it just tears up the rules.

“You can have a compliant file and still have a FOS claim. The FCA can put you out of business, but FOS can take your house away.”

Newell pointed out DB transfer claims are the latest issue advisers, regulators and insurers have to deal with, and have much in common with other areas of business that caused issues in the past.

He said: “There has always been a product that is the focus of everything we are talking about. It used to be structured products and then payment protection insurance. But the way DB transfers are different is the complexity of the claim.  PPI claims were simple compared to them.

“Currently the PI insurers are policing the market better than the FCA but firms need to start saying no and turn away clients from DB transfers. The pensions review from the 1990s cost the industry £14bn but it would cost much more in today’s money. We need to get ahead of this now.”

Ellis added: “Financial planning is an art and not a science. We need to make sure there are more structures around some of the procedures. A DB transfer is like heart surgery. It might not be good for you, but go to a licensed surgeon.

“FOS is there to protect consumers but we need a better system and well-rounded insurance market. We all need to be working together to drive through better results.”

Heath said that there should be “a two-tier system to deal with small claims and a different one that has the expertise to deal with complex cases”.

He added: “A better way needs to be found otherwise no one will be able to get advice.”

Recommended

Money-Cash-Coins-GBP-Pounds-UK-700x450.jpg
106

How much are advisers charging for pension transfers?

Defined benefit pension transfer charges are being put under the microscope again as the regulator turns over more potential conflicts of interest. With the British Steel Pension Scheme the latest to dominate headlines and the FCA ready to interrogate further as it extends its review to include all firms authorised to give pension transfer advice, […]

Ian McKenna

Ian McKenna: The tech provider shaking up the protection space

In the seven years since technology provider iPipeline acquired the Assureweb business, the company has made huge advances in what is offered to advisers via its portal, as well as a number of other significant acquisitions. In January last year, it bought TCP Life Systems, the company that now provides the life insurance administration for […]

Tapering of annual allowance – adjusted and threshold income

The definitions of adjusted income and threshold income used to determine whether, and to what extent, someone’s annual allowance will be reduced can be confusing.  Here we try to make sense of it all. The annual allowance will be reduced for high income individuals from 6 April 2016.  Our previous article Tapering of annual allowance […]

Navigating volatility

The making of any fund can be seen in how it responds to crises and opportunities. In this short video, Head of Multi Asset at Royal London Asset Management Trevor Greetham outlines how the Royal London Global Multi Asset Portfolios or GMAPs navigated through Brexit and the US election cycle. He also highlights the importance […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Essentially there is no ‘rule of law’ in retail financial services. And no property rights. Neither the FCA nor the FOS have any legal, financial, or democratic accountability. Which is entirely unacceptable in a free society. You cannot hand powers of sanction and coercion to unaccountable bureaucrats because they will always abuse them. Their incentives are only to expand their own power and control. The only solution is to scrap the current system by bringing it under direct Ministerial control and hence answerable to Parliament. You have rules FOR bureaucracies, not BY them. When you let bureaucrats set their own rules you get the chaos we now see.

  2. Writing as a mere mug who had half a million gouged from his pension fund by a ‘financial services’ firm, my comment is that FOS should be given more resources and powers to support people like me. At present, the odds are all in favour of the financial advisors and the legal vultures that they can afford to employ.

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com