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We need a review of misregulation

It seems that the Financial Ombudsman Service continues to fine advisers for shortfalls that are caused by regulatory-imposed projections, that is, that were imposed on the adviser and the provider by the regulator.

The FSA may not now be continuing with this Lautro practice but the FOS still perpetuates this injustice.

An example is the FOS decision tree No 25. This decision tree has been removed from your website but not its use. Can you confirm that the FOS would take account of the Lautro factor when considering endowment shortfalls and will review those fines already imposed which have not?

Your website says the following:

  • We’re completely independent and impartial – just as a judge would be if the consumer went to court instead.
  • We are not a regulator (“watchdog”) or a trade body or a consumer champion.
  • Our role is to settle disputes, without taking sides, so when we look at a complaint, we give both sides a fair hearing.

At what level of misselling would the “completely independent and impartial” FOS consider it appropriate to act? Would miselling estimated at up to £200m be sufficient? Would the FOS “without taking sides” investigate misregulation and accept responsibility for its part in this injustice and stop the existing and future persecution of advisers?

This should not be a problem, if ,as you say, you “give both sides a fair hearing” and one assumes that if you were found to be at fault the FOS would fully accept responsibility and apply an appropriate remedy for all those that have been wronged and those that continue to be wronged.

I would like to call on you to instigate a misregulation review. There are many cases where your organisation has found against advisers for an endowment shortfall where the illustration layout with its projected return was dictated by the regulator, Lautro, not the financial adviser or the IFA. I understand this matter has been brought to your notice by many advisers over recent years but ignored.

Simon Mansell

Temple Bar IFA, Worcester


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