Lives: Highgate, North London
Born: June 4, 1945, in East Sussex
Education: Bradfield College, Berkshire and Trinity College, Oxford
Career to date: Director of Camden Community Law Centre, Writer for New Law Journal, Head of Communications at the Law Society, Insurance Ombudsman
Career Ambition: “Very happy with whatI am doing now, thank you.”
Life ambition: “To win the tennis tournament of my local club, which is unlikely.”
Likes: My motorbike, tennis.
Dislikes: “Being asked silly questions.”
Peers say: “What a nice, lovely person.”
Motorbike: Kawasaki 550GT
Walter Merricks is not a man afraid to speak his mind. The Chief Financial Ombudsman holds you in a forthright, friendly yet inscrutable stare, and picks his words with a careful, lawyerly mien.
When Merricks describes how the Financial Ombudsman Service was deluged with endowment complaints just as it was trying to get up and running two years ago, there is obvious disappointment. He says: “I hope there will not be any other large-scale issues coming our way. The industry needs to work together with the FSA to think ahead, given that these are all long-term products.”
A sense of mistrust is still apparent. When he is asked about future complaints about, perhaps, stockmarket-linked bonds, he says: “It would be nice if I learnt of potential problems from the industry and the FSA rather than wait to read about them in the pages of the financial press. Surely there are people in the industry who are aware of these issues.” He is also happy to be on the record in his observation that many who were responsible for past scandals are still at their desks.
Merricks accepts that he has many complaints on his books about Equitable Life. But in careful, legalistic language he says the FOS will not propose to reach conclusions in advance of the compromise agreement. “There is no point in our trying to reach decisions on individual cases if it is going to be the subject of a general agreement. We would not want to uphold a decision that would simply allow some to jump the gun.
On the question of the FSA report into its own handling of the Equitable debacle, he says he has not seen it but will “read it with great interest” when it is published. “It will no doubt throw light on the FSA's state of knowledge and what it was being told by Equitable.” But he adds: “This might not be the whole picture.”
Geographically, little separates the regulator and the Ombudsman. The offices of both the FSA and the FOS lie in the shadow of Canary Wharf's tallest building, One Canada Square, but on opposite sides.
Merricks has been forthright in his opinions on the industry. He has questioned the number of reviews that the industry is undergoing and says he has yet to decide whether he is going to submit a response to the Sandler review. On polarisation, he says it is not his place to comment on any changes to the regime but he is concerned that consumers may be confused as to whom they should complain.
The present poor performance of the stockmarkets will, he says, have an impact on his work in at least two ways. On endowment complaints, the current FOS bugbear, he says: “Reprojections will no doubt be at lower surrender values, opening a larger shortfall, which will encourage more complaints.” Merricks notes that complaints and litigation increase when there is an economic downturn.
From April next year, there will be a new system to pay for the FOS. Merricks says: “I do not think everybody will ever be entirely satisfied with paying subscriptions to the regulator or ombudsman. Everybody should pay something for the running of the service and the general underpinning of consumer confidence it supplies. But those who have more complaints should pay more. We thought a 50-50 split between subscription and case fee was appropriate.” The subscription will be calculated on the basis of how many RI a firm has and Merricks says IFAs can expect the case fee to be around the £350 mark.
An Oxford graduate and a lawyer by training, Merricks eschewed lucrative private practice, choosing to start his career as director of a community law centre in North London, underscoring a passion for the administration of justice which he describes as informing all his work.
A spell as a law lecturer followed, after which he worked a journalist covering the fledgling legal affairs area. A 10-year spell as head of communications at the Law Society then served as a launchpad for his next job – Insurance Ombudsman from 1996 to 1999.
When the ombudsman services were being consolidated into one to reflect the establishment of a unified regulator in the FSA, Merricks was appointed Chief Financial Ombudsman of the newly created FOS. He is keen to point out he got both posts after to replying to public advertisements.
Every morning Merricks rides to work on his Kawasaki motorbike. His home is in leafy North London Highgate where he lives with his wife. Between them, they have three children. Outside of work, Merricks is a keen tennis player and assists a self-help charity for people who suffer from fertility problems.
His legal background clearly informs his work. Some legal careers culminate with being appointed a judge which, in effect, is what Merricks has done, albeit in a more high profile and unusual route.
He views with consternation the possible consequences of the recent Competition Commission ruling, blocking the General Insurance Standards Council obliging intermediaries selling general insurance to submit to its regulation. He is careful not to attack the decision but thinks it has serious implications for self-regulation. Without compulsion, people will not join. He says. “If the only way that regulation can come into being is with statutory backing this would be troubling as Parliament will not have time.”
The present situation, in which certain insurance products escape regulatory scrutiny altogether is one with which “consumers are not going to be happy with this for very long”.