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LIA leads call to scrap ombudsman case fee

The LIA is leading calls to abandon the Financial Omb udsman Service&#39s £500 fee per case, win or lose, as the service launches a consultation on future funding.

Chief Ombudsman Walter Merricks has made it clear it will take a lot to convince him to change the system, warning IFAs it could cost up to £2,000 for a lost case.

But industry representatives continue to press for a move to a system where those found guilty pay, abandoning a system which many IFAs believe is inherently unfair.

LIA spokesman John Ellis says if firms face bigger fees if they lose the case, it serves as an incentive to do their jobs better.

The three-month consultation on how the scheme should be funded started last week.

The ombudsman service says it is eager to hear what the industry has to say on funding arrangements.

The proposals in its consultation paper say funding should be split between an annual fee and per case fees.

Chief ombudsman Walter Merricks says, however, it would take some convincing to get him to change his views towards another funding option.

The current funding systems of the eight existing schemes will continue until the first full fiscal year in which the FSA is up and running, which is likely to be April 2002.

Merricks says: “There are a number of reasons why I am not in favour of that solution. The costs involved with the firm that did lose would be substantial.”

Ellis says: “There is a point of justice here. If a firm as a result of the Ombudsman&#39s investigation decides they did not do anything wrong, I do not think they should have to pay a fee.”


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Axa appoints marketing director

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Investec calls up new mobile technology

However Lakey disagrees. He says: “The product literature is confusing. Not enough detail is provided regarding the charges, the reason for its offshore base and its dollar denomination.”Looking at the product overall, Chapman says: “To launch just another technology fund would have meant little press coverage. The marketing boys have therefore come up with this […]


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