Chief financial ombudsman Walter Merricks has defended polarisation, claiming scrapping it in favour of multi-ties would “muddy the waters”, leaving consumers confused about who to complain to if things go wrong.
Speaking at the Institute of Financial Planning Conference, Merricks also said the “industry is getting exhausted” with ongoing consultations from the Treasury and the FSA.
During a question-time session at the conference, Merricks defended polarisation, saying it makes it clear which company sold the product. He says he has raised the issue with the FSA of who would take responsibility if companies were selling each others' products under a multi-tie.
When questioned by an IFA on the Sandler review, Merricks said “consultation after consultation” was exhausting and it may be time to “let the market take its own steps”.
He said consumers get too much information, which was partly driven by regulation and “one way to ensure that people do not read what they get is getting too much paper”.
Merricks also voiced concern about how the ombudsman service will cope with the growing number of complaints on projected endowment shortfalls from consumers which he fears may increase as stockmarkets tumble. He said endowments now make up 55 per cent of complaints compared with 5 per cent two years ago and the FOS was “almost bowled over” by the volume.
FSA spokeswoman Louise Buckley says: “We have taken Walter Merricks' concern about branding of products on board and we are doing consume research, which will be presented at our open meeting.”