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Watchdog blundered with probe over PHI

A botched Financial Ombudsman Service investigation into an IFA firm has exposed worrying levels of confusion among the watchdog’s front-line staff, says a Croydon IFA.

The FOS has admitted mistakenly launching a probe into Mortgage Life & Pensions over the alleged misselling of a Swiss Life PHI policy after its staff failed to recognise that the product was non-regulated and that it had not yet been issued to the client.

In a letter responding to MLP senior partner Paolo Standerwick’s concerns over the investigation, an FOS senior consumer consultant says: “I can advise that until we have sight of evidence that the proposed policy that the client was advised to enter into is outside the remit of this office, we are at this stage unable to alter our decision.”

But in another letter issued to the complainant, after consulting Swiss Life, the consultant says: “It appears that your complaint falls outside the remit of this office, as the product that is the question of your complaint has no investment element attached to it.”

The FOS has since declined Standerwick’s request for compensation for the mishandling of the case and “wasted time”.

But in a letter to Standerwick, a member of the FOS service quality team says the volume of enquiries handled by the ombudsman makes it inevitable that some cases will prove “problematic”. It adds: “I am satisfied that the majority of the general public and, indeed, the regulated firms, continue to have confid- ence in the service and that they and we are, in general terms, aware of the scope and limitations of our remit.”

Standerwick says: “This is a real danger to the industry which we are pow- erless to do anything about. It is ridiculous that the front-line staff at the FOS do not even know what is in their remit. Why should it be my responsibility to tell them what is in their jurisdiction?”

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Apple: a stellar technology story

By Ali Unwin, head of technology sector research

Apple recently announced the highest-ever recorded quarterly net profit ($18bn), with the sale of 74.4 million iPhones helping the company deliver $74.6bn of revenue for the quarter ending December 2014. These sales were largely driven by strong demand for the new iPhone 6 and iPhone 6 Plus. Highlights included Chinese iPhone sales doubling year-on-year and unit growth of 44% in the US — supposedly a well-penetrated market. Apple ended the quarter with $178bn in cash on its balance sheet, having generated a staggering $30bn in free cash flow during the quarter.

At Neptune, we have been long-term believers in the Apple story, and continue to hold the stock in a number of our portfolios based on the company’s long-term growth prospects. This is predicated on our belief that Apple has proved thus far that it can — unusually for a consumer electronics company — maintain high margins for a sustained period of time, even as adoption of new technology slows down and competitors produce similar-specification products.

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