FOS chief urges advisers to tailor suitability reports to clients more

Caroline Wayman FOS

The Financial Ombudsman Service says advisers should take a more tailored approach to suitability reports as it sets out efforts to make the organisation less removed from the advice frontline.

Speaking to Money Marketing, FOS chief executive and chief ombudsman Caroline Wayman says advice complaints have largely related to annuities and unregulated collective investment schemes over recent years.

Wayman says investment complaints largely centre on the suitability of advice and the FOS is currently involved in work with Apfa about the format of suitability reports. She agrees with the trade body there should not be a rigid template for reports and says lengthy reports can be detrimental to the consumer.

She is aware of suitability reports that include information about products that are not relevant to the customer’s financial situation and says it is important for advisers to tailor the reports to the individual.

She says: “It creates a greater risk that people will not read them and not get the information they need. The first thing to think about is how to help the customer get the information they need. The chances of us getting involved are so much less if people know [what product] they have got.”

The FOS has restructured its teams so that complaints are dealt with earlier on.

Under the new system, ombudsmen work closely with groups of five investigators with the aim of bringing them closer to the frontline and, ultimately, reduce the cost of resolving complaints.

Wayman says: “Previously the ombudsman would only get involved when things get thorny. I want them to be in the heart of the organisation.

“Our experience is a lot of complaints can be more readily resolved if we can pick up the phone. We are trying to look at areas where process is not a barrier. It is about getting people answers as effectively and efficiently as we can.”

One initiative introduced to bring ombudsmen closer to consumers is having an ombudsman, including Wayman, do shifts on reception and handle walk-in consumer queries.

The FOS has also been getting closer to the adviser community through industry roundtables as recommended in the Financial Advice Market Review.

The first roundtable was held in September in Glasgow, with another planned in Stockport in November. As well as suitability, advisers have been airing concerns about staff qualifications and training, claims management companies, and pension complaints.

According to Financial Ombudsman Service data disclosed to Money Marketing, 630 complaints about pension freedoms have been submitted from April 2015 to August 2016  with “around double” the number of enquiries.

The FOS says the complaints concern delays, administration, advice and exit fees, with 26 per cent of complaints upheld.

But Wayman says the high volume of pension freedom-related complaints has not materialised.

She says: “A lot of people expected we would see a lot of cases after pension freedoms but we haven’t. It has been steady.”