View more on these topics

FOS must not make hasty decisions

The Financial Omb-udsman Service is to extend its timescale for introducing a new funding regime. This delay strikes me as bad news for the industry and I hope the FOS will take every opportunity to reconsider.

IFAs tend to have a good track record with the FOS. We account for only around 14 per cent of complaints and, of these, over 70 per cent go in the firm’s favour.

We welcomed the fact that the FOS took our views seriously and embarked on a funding review. Its discussion paper was mainly positive, with sensible options for a better funding regime discussed. It is no secret that we opted for a system that should basically deliver an Ombudsman scheme that would be free to almost every IFA firm when looked at from a case-fee position.

Further, the end of a higher special case fee of 475 would see a particular cause of concern eliminated.

More important, the move away from a levy based on the number of FSA permissions held by a firm and to a single firm fee recognised the value of holistic financial advice and was a huge step forward. In my view, the current system penalises IFA firms which want to offer holistic planning as they must pay an FOS levy for activities where their business levels may be negligible.

We would also like to see networks and other big firms have the ability to buy a block number of cases in advance, so recognising the particular needs of the biggest businesses in our market.

All these points were made in our response to the discussion paper and are focused on improving the way that the FOS is funded. However, that only tells part of the story. Funding and operations go hand in hand and cannot be unbundled. What you do with the money is at least as important as how you raise it.

That is why our response to the FOS also called for wider issues to be addressed. We recommended that the FOS create a specific and high-profile small firms division, a parallel of the FSA’s team with the task of handling the special demands of smaller businesses. This team, with an individual heading it, would be responsible for handling the complaints made against IFA firms and others that, by their nature, tend to attract more complex disputes.

This system would ideally suit firms which get fewest complaints, where they are not experienced in the intricacies of the FOS system and where, most importantly, they are not looking for a “plea-bargaining” result but want to test the veracity of the complaint.

The system would also see personal oral hearings conducted on a far more regular basis.

It could easily be argued that this system does not conspire to produce swift resolutions, does not sit easily with slick process and may even lead to some delay. I fully accept this may be the case but would argue that these are secondary issues.

It is important that any change is given due time for consideration and that the industry’s preparedness for change should be factored into the decision-making process.

However, I feel that I must urge them to proceed with all due haste. These are issues that firms feel strongly about. There is never a perfect time to change and the perfect must never become the enemy of the good.

Chris Cummings is Aifa director general


PPF helps 43,000 scheme members

The Pension Protection Fund helped 43,000 pension scheme members in its first year, with 10,000 already getting payment.

A third of firms see senior management buy-in as biggest TCF barrier

Senior management buy-in is the biggest barrier to firms implementing TCF, according to a third of delegates at the FSA’s recent conference.The 400 financial services practitioners at this week’s FSA TCF conference were polled on their views of the barriers to TCF and how their own firms were progressing with this initiative.33 per cent said […]

Skandia appoints four to its open architecture business

Skandia’s newly created asset management division has made four new appointments to form the senior team for its open architecture business.The team will be responsible for the on going development of the group’s £25bn self select fund range.Richard Vincent has been appointed head of strategic fund partnerships and will be responsible for the overall construction […]

Lenders are arrogant over payment cover, claims Carr

Lifesearch head of protection strategy Kevin Carr has accused the mortgage industry of “arrogance” over payment protection insurance. He claims that lenders have washed their hands of responsibility after the Council of Mortgage Lenders expressed its surprise last month that MPPI was referred to the Competition Commission along with the rest of the PPI market. […]

US equities: opportunities for short sellers expand

Optimism is as American as baseball and apple pie. And since the financial crisis, being optimistic about US equities has paid off: they have outperformed every other major developed market by a comfortable margin. Yet while there remain plenty of good reasons to be optimistic about US equities, Stephen Moore, manager of the Artemis US […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    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