David Cresswell argues some advisers have the wrong impression about the service
The Financial Ombudsman Service’s strategy director has attempted to dispel a number of misconceptions he believes advisers have about the complaints adjudicator.
In an interview with Money Marketing, David Cresswell also offers tips on how IFAs should approach their dialogue with the FOS.
One of the first beliefs he addresses is that the FOS is “out to get” IFAs.
Cresswell says: “You are not in the witness box, or worse, that we are prosecuting counsel. We are absolutely not. We are not the regulator. We are not marking your homework. We are not looking at how you did or didn’t breach rules…For us, what’s that got to do with the consumer feeling this is unfair? It probably doesn’t.
“We are not looking for trick questions but we do need to know what happened…What [advisers] think would be good legal tactics, holding back stuff, doesn’t help.”
Cresswell says the FOS is not about “pointing out who is right or wrong, which rules you broke, who is responsible or not responsible”, but “finding a formula moving both sides on”.
He also rebuffs IFA criticism that FOS adjudicators are not sufficiently qualified to judge on advice complaints. The FOS is currently moving to a model where complaints are getting resolved quicker because queues don’t build up for specialist ombudsmen to deal with them, Cresswell says, and the organisation is able to spend less money paying adjudicators on retainers when complaints about their specialism dry up.
Cresswell has seen complex pension complaints taking months to solve, where it turns out that the case did not hinge on any of the reams of material provided to the ombudsman, but was actually settled by something very simple, like a client not receiving a statement.
He says: “When you say that, you get a sense of: why did it get this far? Why did no one see it? That’s the value of a third party. An experienced person vetting the background would be able to do that, and explain it in a way both parties will understand…We prove our worth not by showing which certificates we have got, but by taking control of the conversation.
“IFAs love it. Insofar as most IFAs have never experienced us because they don’t get a terrific number of complaints, this is what they thought it would be anyway.”
He urges IFAs not to write suitability reports for “what the solicitors or PI insurers may or may not say about regulations that haven’t been written yet”.
Cresswell notes another example where a 30-page suitability report had five pages of stock text about investment growth through the client’s 20s. The client was in their 50s.
He says: “If you are going to do that, IFAs, I’m really sorry about that. It can’t be what you wanted or what the service is about.
“It goes back to do what you think is best, you are the professional…We are in danger of losing the idea that IFAs are fabulous professionals, best placed to serve clients. I’m concerned if that’s replaced with covering their backs.
“I always say if you want to know about customer service go to an IFA.”
He encourages advisers to record phone conversations, which can be “so much more helpful than was it in the factfind or not”.
Few IFA complaints make it through to a final ombudsman decision, Cresswell notes, but IFAs “psych themselves up for that”.
Particularly over impending defined benefit transfer complaints, he says “we all rush to our fears” but we should not be scared of the latest sector that is being talked up as awaiting complaints.
But when decisions do go against IFAs, he says the service is transparent on why this has happened.
He says: “We exist because everyone decided the courts were pretty hopeless at this kind of thing.
“Ultimately all you can say is we have got no secrets at all. We can’t have; every single Ombudsman decision is published.”
The FOS will set up its first out-of-London office in Coventry next month.
Cresswell says: “It’s always been an embarrassment to me that we have got all these people in London. In the long-term its unsustainable.”
However, he says the FOS, having looked at what it needs in locations like Manchester, Cardiff and Edinburgh, has found it would be three times as expensive as the deal it struck on its London premises.
He says: “The biggest challenge for us going forward is we can’t be London centric in any way. Its more than just where we are based, that seven out of eight people don’t live within the M25; we need to get how it is for an IFA in on the Isle of Harris and a single mother in Taunton.”