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FOS: ‘The rules are clear on suitability and insistent clients’

FOS “on the same page” as advisers when it comes to resolving complaints

FOS chief executive Caroline Wayman
FOS chief executive Caroline Wayman

The Financial Ombudsman Service has claimed its expectations around suitable advice and insistent clients are clear, as its data shows advisers account for less than 1 per cent of all plaplaints.

In its annual review for the 2016/17 financial year, published today, the FOS says advisers accounted for 0.5 per cent of the total 321,283 new complaints received by the FOS over the last year.

The FOS says it is “on the same page” with advisers when it comes to resolving complaints, and sets out the efforts it has made to engage with advice firms. Prompted by the Financial Advice Market Review, the FOS has held several regional roundtables, as well as seven of the FCA’s Live and Local events.

In the review, lead ombudsman Caroline Mitchell says: “The roundtables have been particularly helpful in getting to the bottom of issues that cause uncertainty for advisers – for instance, what should be included in suitability reports, and how we’d approach cases involving “insistent clients” on the back of pension freedoms.

“We and the FCA have been able to explain that the regulator’s guidance in these areas is clear, and that if a business has done what it should, then there’s no need to worry.”

She adds: “We’ve really welcomed the honesty of conversations like these and look for ward to them continuing into next year and beyond.”


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There are 8 comments at the moment, we would love to hear your opinion too.

  1. Good to know everything is strong and stable…

  2. Very positive, maybe there is a moral to this article for Caroline to ponder…… listening to the adviser community… must do more of it !

  3. This seemed like good news until I read the part
    “We and the FCA have been able to explain that the regulator’s guidance in these areas is clear,…..”
    My concern is that they had to explain the guidance is clear then clearly from the advisers view point in must be anything but.
    Is it only me??????

  4. I don’t care how “clear” the guidance is on Insistent Clients. Any number of reported FOS verdicts indicate strongly that its stance tends to be that if a proposed course of action doesn’t look right then, by merely having facilitated it, you will be held liable for a bad outcome. Signed disclaimers of liability are commonly disregarded.

    Give your advice and, if the client wants to go against it, walk away without looking back.

  5. If you execute a transaction for someone that you’ve advised not to proceed with I recommend that you keep your chequebook handy to write the compensation cheque out. You really don’t want the money for executing that transaction as you will only be paying back much much more when the individual decides they don’t like what has happened. This could be 1,5 50 years away and that transaction will hang over your head like the sword of Damocles.

  6. Sorry but the cynic would say that the rules are clear till a complaint is lodged and then found against the adviser. Thankfully we have not had one on ‘insistent client’ rules but it will only be a matter of time.

  7. So, saying no to a client (and documenting such) is ok but not providing any advice (execution only) is not acceptable? I’m confused as I remember the case of the guys who invested their pension funds in an overseas golf venture without taking advice and they got their money back via FOS as the adviser should have advised them not to do it rather than transacting as instructed by the ‘clients’. It all seems a bit unsure… advise, don’t advise… or just walk away, yes I prefer that one thanks! I have clients whom I would trust for more consistency in their decision-making than the FOS and that’s how I want to keep it.

  8. May I suggest the case referred are so low against regulated advisers is likely to be due to the fact that advisers are refusing to transact insistent clients, until there are clear processes and caveats defining the future liability.
    This seems to be a case of let us pat ourselves on the back, look we have done a good job it must be clear as the complaint numbers are so low, before looking at the actual data. Its not how many cases are referred, but what total of business completed by advisers is referred!

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