FOS dispels ‘myths’ about bias against advisers

The Financial Ombudsman Service has challenged the view it is biased against advisers and takes an inconsistent approach to the profession in rulings.

Lead ombudsman Caroline Mitchell criticised several “myths” advisers have about the body at Money Marketing’s Retirement Summit yesterday.

She says it is not true FOS will rule against an adviser if they do not put all information about advice in a suitability report.

FOS prepares for MP investigation

However, information most relevant to giving that piece of advice is important because suitability reports should be tailored to a client’s needs.

Mitchell challenged the claim FOS ignores disclosure or risk warnings. She also challenged the argument the organisation faces that because FOS staff are not advisers themselves they are not qualified to make judgments against IFAs.

Mitchell adds: “This sector has an excellent record and complaints against advisers make up a very small segment of our workload. Last year we received 340,000 complaints and only 17,000 were against advisers.

FOS fields 40 cases over collapsed Sipp provider

“Also we have had only 1,300 complaints relating to pensions since the freedoms started just over three years ago [April 2015] so this is not a huge problem.”

FOS makes evidence based rulings so advisers who take time to understand their client’s needs, ensure risk warnings are clear and produce tailored suitability reports are unlikely to fall foul of it, she says.

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. Nicholas Pleasure 8th June 2018 at 12:14 pm

    Whatever….it’s still an insult to justice and our proession that this organisation can make awards of up to £150,000 against our firms, with no right of appeal.

    Shameful

    • Indeed, a power that no court in the land possesses.

      When summary justice can result in the removal of someone’s livelihood and house the rule of law is compromised.

  2. And, no right to a personal hearing.

    And, that the FOS can and continually does ignore Statutory Instrument 2326 which obliged them to take into account the position that the PIA Ombudsman would have taken if the advice pre-dates December 2001

  3. I don’t deny they are evidence based but………do they take into account ALL relevant evidence? Particularly that provided by advisers?

  4. I have two cases where an IDENTICAL letter was sent to the clients.

    One adjudicator and one ombudsman said it was sufficient to start the clock for the timebar. The other adjudicator and ombudsman said it was not.

    This is not “myth”, it is fact.

    The possible explanations are:

    Ombudsman 1 and adjudicator 1 are wrong

    Ombudsman 2 and adjudicator 2 are wrong.

    All four are wrong.

  5. If I were a cynic I might think this was in preparation, and laying the ground, for the upcoming investigation of the FOS by MPs. Highlight all the positives, get the community onside, etc.

    Of course, I’m not a cynic so it hadn’t occurred to me.

  6. I agree with the comments above from Nicholas, Grey Area, Alan and Peter above.
    The issue I have as an adviser is what Peter has highlighted I believe i.e. inconsistency and opaqueness.
    Case law sets precedent, but the FOS and their reported cases (of which I agree with more FOS decisisons both for and against the adviser, i.e. they get it right MORE often than not)do not always clearly explain the reason for the decision and in too many cases, even when the complaint is not uoheld in any material way, a cost for upset of the consuemr is imposed against the adviser firm.
    FOS decisions which look unclear of incorrect to advsiers should have some kind of external review/appeals process. Whilst this woudl incraese costs slighly, tehre are enough people already reading FOS decisions for a panel of peer rerview to be established and it be agreed by FOS, thaty if a panel votes a case should go to external review (very few cases I would hope)and where afetrr the review, the FOS cannot demonstarte to teh panel the logic of the decision, the case should have to be sent to the courts for the decision toc reate a precedent.
    I am just about to have a planning applicvation declined, which is completely within the rules from what my planning consultant, acrchitect and I have read and will go to appeal and in all liklihood we will have the council’s decision reversed at appeal. The point is, we have the right to an appeal in law if we are pig headed eniugh to pursue it. With the FOS, the only appeal is for a Judicial Review, which is NOT an appeal, it is a check of procedure and can cost more than the incorrect decision by the FOS.
    I am all for making the justice swift and mroe cost effective, but just because it is swift (relatively) doesn’t make it just.

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