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Watchdog Merricks slams PI insurers

The Financial Ombudsman Service has slammed professional indemnity insurers for promoting an “admit nothing” attitude among IFAs dealing with the service.

Speaking at Aifa&#39s first conference, chief ombudsman Walter Merricks made a plea to IFAs to help foster a fresh relationship with the new service without allowing PI insurers to sour good relations.

Merricks said the new service aims to complete 95 per cent of all cases within a year but accused PI insurers of slowing the process down.

He argued that a significant proportion of cases outstanding after a year involve the unseen participation of PI insurers.

Merricks encouraged IFAs to inform the FOS if their PI insurer takes a hand in delaying their response to complaints.

Merricks kicked off his presentation by suggesting many IFAs think the ombudsman at best represents a necessary evil but at worst is seen as “an interfering and expensive nuisance imposed bythe regulator to second-guess your judgement”.

Generally, IFAs were said to have a good track record. Of around 11,000 complaints last year, only 15 per cent were against IFA firms.

Merricks said: “The PI insurer will often advise the IFA to admit nothing. Dueto the number of pension review cases currently being handled by the main PI insurers, it can take months to receive a response.

“Keep PI insurers informed and let us know if they are delaying your response.”

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