View more on these topics

Chris Hannant: Time to ban claims firms from financial services

Chris-Hannant-Headshot-in-2013-700.jpg

The Government is finally cottoning on to what the rest of us have known for some time: claims firms provide no useful purpose other than helping themselves.

The Ministry of Justice has just published proposals that will tighten up the rules under which they operate. But while this is very welcome, it does not go far enough.These companies are a cost to us but there is no need for them in financial services.

With the Financial Ombudsman Service a consumer needs no legal training, no expertise on regulation and no knowledge of what a firm should or should not have done. All they need is to be dissatisfied and know where to make a complaint. The FOS will investigate and look at different angles, so the consumer is protected from ignorance of how to frame it.

Why not ban claims firms from financial services?

While at this stage it is unlikely we will see such a drastic step, more needs to be done to curb the excesses. So in addition to the restrictions on compensation and fees, it is time to introduce a charge for claims firms to bring a complaint to the FOS. Fees paid by consumers should be capped to stop them being passed on.

This should incentivise claims firms to better vet cases and do their own research.

The Ministry of Justice proposals are a step in the right direction but I urge advisers and others adversely affected by these companies to push the Government to go further.

Chris Hannant is director general at Apfa

Recommended

Schroders head of emerging market equities Conway to retire

Schroders head of emerging market equities Allan Conway is retiring from his role after 11 years. Conway will continue in his role as fund manager and head of the team until August 2016. He will then be replaced by emerging market fund manager Tom Wilson, who works within the firm’s global emerging market equities team. […]

Stressed-man-on-phone-angry-700.jpg
7

Advice complaints plummet in second half of 2015

Complaints against advice firms plummeted in the second half of 2015, the latest Financial Ombudsman Service data reveals. The FOS recorded 4,136 complaints about life and pensions advice between 1 July and 31 December 2015, down 12 per cent from 4,680 in the first half of the year. Similarly, investment advice complaints fell 22 per […]

David-Ferguson-Nucleus-2013-700x450.jpg

Nucleus to consider stockmarket listing next year

Nucleus could pursue a stockmarket listing as soon as next year, Money Marketing can reveal. The platform has previously indicated it would pursue an initial public offering at some point. However, the firm had not until now disclosed when this would happen. In an interview with Money Marketing, Nucleus chief executive David Ferguson reveals a […]

BoE-Bank-of-England-700x450.jpg
1

Banks ‘too weak’ for negative interest rates

Bank balance sheets are not strong enough to cope with negative interest rate policy, one economist has warned. David McWilliams, an economist writing for Woodford Investment Management, says the banking industry is still recovering from the financial crisis and the more recent China turmoil and is not stable enough to cope with negative interest rates. […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment