I have just finished reading a brilliant book by neurosurgeon Henry Marsh called Do No Harm.
The senior managers of the Financial Ombudsman Service could do with reading it, in particular the part where Marsh tells of a case review managed by NHS personnel whose qualifications and technical knowledge were conspicuous by their absence. Can it really be right the performance of an experienced, competent and qualified surgeon is judged by those without such attributes?
While not usually about life and death, financial advice is highly complex. So it is only fair a client complaint that arrives in front of an adjudicator or ombudsman be dealt with by someone with equivalent experience and qualifications as us.
I am not the only one who thinks this. An adviser friend of mine recently wrote to the FOS asking for reassurance any complaint that might be sent to them would be dealt with by personnel as technically competent as he is.
He wrote: “I must (and do) hold advanced level pension qualifications before being able to offer advice in this complex area. I would therefore, as a minimum, expect anyone adjudicating on complaints in this area to be similarly qualified. How many (and what percentage) FOS staff involved in this area hold the CII AF3 or CII G60 pension qualifications (or equivalent)? And is AF3/G60 a minimum FOS qualification requirement for staff adjudicating in this complex area?”
These strike me as reasonable questions. After all, advisers have had to significantly up their qualification game, so presumably those who adjudicate complaints have had to do the same?
Here was the response: “While your role is to give financial advice, our adjudicators and ombudsmen do not give financial advice. Their role is to settle disputes between consumers and financial businesses. The technical, academic and professional experience of our adjudicators and ombudsmen are diverse. So we do not require our adjudicators and ombudsmen to hold specific qualifications.”
Wow. Leaving aside the blindingly obvious (and somewhat condescending) start to that response I think it tells us all we need to know about the FOS. It hangs onto a broad statement about diverse experience and technical knowledge but goes on to state: “We do not require new and current employees to record their qualifications on our HR systems and therefore are unable to provide you with the percentage of adjudicators and ombudsmen who hold the qualifications you mention.”
Imagine an adviser firm saying something like that to the FCA. We all know where that would lead.
Are my friend and I being unreasonable? Can it be that to judge on a complex defined benefit to defined contribution transfer complaint a lower qualification standard is acceptable? I accept both advisers and adjudicators or ombudsmen need to keep their knowledge up to date but surely the base starting level should be the same?
Marsh found himself being judged by managers and customer care staff in the NHS. I am not for one moment saying we are like brain surgeons but surely the FOS staff should be suitably qualified and fit for purpose?
Nick Bamford is executive chairman at Informed Choice