Chief financial ombudsman Walter Merricks is concerned about the effects that depolarisation will have on the market and fears it will confuse consumers.
Speaking at a round table of IFAs hosted by Money Marketing in London last week, Merricks revealed his concerns about the ability of consumers to be sure about who they can bring their complaint to in a depolarised world.
He said it is possible that consumers may not be at all clear about the structure lying behind the various distribution arrangements that will be on offer once the industry is able to use multi-ties.
Tenet Group director Geoffrey Clarkson voiced his fears that complaints will increase with the onset of depolarisation and called on Merricks to provide clear guidance about how decisions will be made.
He asked if the FOS will judge IFAs on whether they have followed the FSA's rules and provided an initial disclosure document to the customer or whether, despite this, the FOS will still be able to say the customer has not understood.
Hamptons International Mortgages managing director Kevin Duffy said: “Will judgements be made on the FOS's own views about what is fair or on whether the IFA has followed the FSA's rulebook?”Merricks said the vast majority of decisions made by the ombudsman are either based on what has been laid down by the regulator, common law or statutory law. He says that the notion that the FOS is producing fairness out of a hat is incorrect.
Merricks said: “It is very difficult to guess what depolarisation will do to us. I am concerned about the ability of customers to be sure about who they can bring their complaints to and the possibility that customers may not be at all clear about the structure behind distribution agreements.”