Conservative MEP Giles Chichester has moved to highlight the plight of a constituent IFA whose business faces closure because of a Financial Ombudsman Services compensation award.
He was contacted by the IFA who says he is unable to afford a judicial review. Chichester thinks that the FOS should never have been set up outside the remit of EU legislation and believes it is unfair that IFAs are left in a position where they have little or no recourse to Europe.
The FOS was set up by the Financial Services &Markets Act in 2000 and although it was established in compliance with the standards of the British and Irish Ombudsman Association, Chichester says this procedure was in no way connected to any EU proposal or legislation.
Chichester says he thinks that the FOS has become judge and jury for small advisory firms and believes that advisers who feel they have been unfairly treated should be entitled to some recourse to a European body.
He says: “Having looked through the IFA's papers,I can well understand his concern and I think his situation highlights the flaws in the regulatory framework set up by the Government when it tried to bring everything together under one umbrella organisation.
“I think it is unfair that the IFA is left with no right of appeal or review or even recourse to Europe.”
The IFA's case has already been taken up by LibDem MP Nick Harvey.