The regulator will be using the industry’s money to appeal against the IC’s decision last month to uphold a request from IFA Defence Union chairman Evan Owen to name the 12 firms which gave customers unrealistically high maturity figures for endowment mortgages between 1988 and 1994.
The saga is now likely to drag on well into next year as we await a date for the Information Tribunal’s final decision on the matter.
In one sense it is irrelevant who is on and not on the list as the majority of providers at the time were using the same practices which legal experts suggest have unfairly increased the amount of compensation IFAs have paid out through misselling complaints.
Those close to the matter suggest providers they know are not on the list misused projections to the detriment of IFAs and consumers and the FSA says the 12 providers on the list have compensated policyholders while it is not known if others have or have not.
The matter will have also increased the amount of IFA compensation paid out by the Financial Services Compensation Scheme, and so all advisers will have paid increased levies to the scheme as a result of the provider’s mispricing.
The aim, and hopeful result, of all Evan Owen’s hard work is not to name and shame any provider but to shine light on a dubious aspect of the regulator’s past in the hope of showing how unfairly the IFA community has been treated.
Owen says that the FSA appealing is good news as it shows it has something to hide and suggests the appeal will give the matter added publicity.
The FSA says the IC ruling raises “potentially important questions about aspects of our proportionate and risk based approach to regulation and how we take action to protect consumers”.
The FSA is worried about firm’s co-operating with future informal investigations if they know the results could end up being released publicly.
But compliance consultant Adam Samuel says the conclusions reached by the IC do not suggest that the FSA will be required to disclose names on a regular basis and there will still be a balancing test to apply.
“The Commissioner must be right to conclude the FSA should not be doing private deals anyway,” says Samuel.
Elsewhere, Money Marketing revealed last week that the FSA spent £13m, 5 per cent of its budget, last year on external consultants.
Like Government departments, outside consultants are used frequently by the FSA when conducting specialist projects with COI Communications and Defaqto topping the list as the biggest paid firms.
Conference season is upon us again with the TUC conference taking place this week in Brighton before the LibDems come to the same seaside town next week.
Again pension reform is likely to be near the top of the financial services agenda with private equity, potential future credit problems and perhaps even the Retail Distribution Review being discussed by the three parties.