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Tenet disputes FOS award increase

Tenet has challenged the increase to the Financial Ombudsman Service’s award limit from £100,000 to £150,000, citing it as a further example of where IFAs are treated differently to other professions.

Tenet has criticised the FOS for operating under a system whereby a final decision cannot be appealed.

The network also says that changes to the way adjudicators and ombudsmen report on their findings will lead to a detailed report being replaced by a summary lacking the context of why an adjudicator has come to a certain decision.

Distribution and development director Keith Richards (pictured) says: “Whilst it is important that consumers have an appropriate mechanism to pursue complaints and are responded to fairly and within a reasonable timeframe, advisers also need to be treated fairly. Whilst there are some changes to the complaint handling rules that we consider sensible and indeed already incorporate into our processes, there are other elements that will add further challenge to an already impacted financial services sector. 

“The current £100,000 limit is much higher than the limit for the new Legal Services Ombudsman which set by Parliament at £30,000; plus the legal profession has a long stop which we are still being denied.  Again, the playing field seems to be less than level for the IFA community.”

The FSA announced the increase to the FOS award limit last month, after first proposing it in March 2010.

In October the regulator admitted that the increase in the award limit from £100,000 to £150,000 may push up the cost of professional indemnity insurance.

The new rules include the abolition of the “two-stage” complaints handling process to make sure firms resolve complaints fairly and do not dismiss them the first time. Firms will also have to nominate a senior individual responsible for complaints handling.

An FOS spokesman says: “Only a small percentage of the FOS’s caseload relates to cases over £100,000, and less than 1.5 per cent of complaints received last year were about IFAs. The FOS has not had an increase to its compensation limit since it was set up in 2001, and ultimately the increase is decided by the FSA rather than the FOS.”

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. Exasperated me 6th June 2011 at 12:05 pm

    Discrimination by occupation. What you going to do about it?

  2. Well done Tenet! For making a noise about this.

    and AIFA what do you say?

  3. Get ready for a new word in Financial Advisorsy speak “Rolling Liquidations”. There is no way of obtaining a fair result if not a client when you go to the FOS so large and small firms will have no option but to Phoenix if they want to stay in the industry. What a shambles!

  4. AIFA say the same as they did on grandfathering-namely- discrimination against IFA’s is OK and has our blessing.

  5. Which firms control AIFA?

  6. AIFA, PFS, CII where are you on this? 6th June 2011 at 4:00 pm

    Of course Networks do have “a pay out, shut up and bill the member” policy towards the FOS. They seldom contest the FOS powers so this move on the part of Tenet is welcome. AIFA, PFS, CII Fay Goddard where are you on this?

  7. Exasperated me 6th June 2011 at 9:29 pm

    Is Rebecca Goddard now at the PFS too also?

  8. Julian Stevens 7th June 2011 at 8:58 am

    And with reference to what other body has the FSA made this decision? None at all I suspect. Has there been any consultation of those who’ll be (potentially) affected. Almost certainly not, but then again the FSA would take no notice of anything anybody else might have to say anyway.

    At the TSC hearing back in March, Hector Sants undertook to go away and reconsider FSA’s continued denial to IFA’s of the protection in law of the 15 year longstop. So far, nothing further has been heard. Has any date been set for the FSA to report back to the TSC on this issue? Or will it be swept under the carpet and quietly forgotten about? At his next appearance before the TSC, Hector Sants may be asked to update the committee, in response to which I expect his response will be “Oh that, yeah, uh, well, er, we did reconsider it and decided that we see no reason to change our position as we see no benefit to consumers.” And that’ll be the end of that.

    Stephen Gay has reported that the FSA has conceded that there are “issues of accountability” but what is this likely actually to mean in practice? My guess is nothing at all, not least because the government has already annouced that the FCA will be accountable only to its own board which, as we all know, means accountable to nobody. Nothing’s changing, except for the worse, and both the TSC and AIFA are completely powerless to do anything about it. The only escape from this pernicious tyranny is passporting out and back in via a non-UK regulatory jurisdiction, regardless of whether you can make the QCF Level 4 benchmark. If anyone else has a better plan of action, I’d be pleased to read about it.

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