A long-stop on advice complaints would have affected just nine cases handled by the Financial Ombudsman Service last year, Money Marketing can reveal.
The Government is consulting over a potential limit to advisers’ liabilities where advice was given more than fifteen years ago.
However, a Freedom of Information request by Money Marketing reveals there were only nine cases in the last financial year where the FOS upheld complaints relating to advice from more than 15 years ago.
Since 2010/11 the FOS has upheld 112 such cases, despite receiving more than 1,200 complaints from consumers against advisers.
The Financial Inclusion Centre director Mick McAteer says the figures suggest the long-stop is a “red herring” in the search for improved access to advice.
Threesixty managing director Phil Young adds: “Based on these numbers, it’s not going to reduce the FSCS levy, and it’s not going to reduce the cost of professional indemnity insurance either. It’s not going to make a blind bit of difference.
“The lack of a long-stop shouldn’t be stopping genuine investment in the sector, because there’s no real risk here at all.”
But Apfa director general Chris Hannant argues the Government should bring an end to unlimited liabilities for advisers.
He says: “It’s partly about the principle, but also if you are running a company and getting into this space then you are taking on unknown and unquantifiable liabilities.
“That liability exists whether there are zero or 100 million claims, so it’s not the quantum, it’s the concept. And you can never cap that off as a business.”
Openwork marketing director Philip Martin agrees: “For us the whole issue of a long-stop is not about how it manifests into complaints and costs. It’s more about the fact that it’s seen as an inhibitor by advisers and potential advisers to coming into the profession.”