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Gummer says retrospective rulings are unjust

Aifa chairman John Gummer has accused the Financial Ombudsman Service of flouting natural justice by deciding complaints against IFAs retrospectively.

Speaking to a packed audience of IFAs at Aifa’s AGM dinner in London on Tuesday, Gummer launched a blister- ing attack on the ombudsman service, saying it is guilty of applying today’s rules to actions taken by advisers years ago.

He said IFAs are being punished unfairly for failing to meet standards or provide information they were not required to at the time they gave the advice.

Aifa director general Chris Cummings argued that IFAs should not have to pay a case fee to the FOS where a complaint is rejected, saying: “Innocence should be free.”

He called for an increase in the industry’s general levy to the ombudsman to make up any shortfall.

FOS chairman Sir Christopher Kelly rejected allegations of retrospection but backed Aifa’s Stakes in the Ground anti-retrospection initiative.

Gummer also criticised the FSA, saying it would be better to have no regulator than one that regulates poorly. He accused the FSA of being oblivious to the cost of regulation and putting IFAs in an impossible situation by expecting them to provide better services despite having to fill in more paperwork and comply with increasingly burdensome rules.

The former agriculture minister also charged the FSA with failing to recognise the ignorance of the general public about financial matters, which he claimed lies behind many complaints against advisers.

Gummer said: “Hindsight is being used to make judgements and IFAs are being asked to provide that which was not required at the time. This is against natural justice.”

FOS spokeswoman Emma Parker says: “We do not apply today’s rules to yesterday’s practices and are confident we can judge past actions fairly and reasonably.”

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