The Financial Ombudsman Service has rejected calls from network advisers for the threshold for free case fees to be set at the level of the adviser and not the authorised network, saying that this was only supported by a minority of respondents to its consultation.
The Fos said that responses to its consultation on the budget plans showed almost total support for the proposal to increase the number of ‘free’ cases to 25. The change means the case fee - which is rising from £500 per case to £550 from this year - is only payable from the 26th case.
However, for network advisers the allowance is set at the level of the authorised entity. Once a network uses all of its free cases, advisers may have to pay the fee themselves as they are rarely covered by the network.
Confirming its plan and budget for 2013/2014, Fos said only a “small number” requested the change for the threshold to be applied at the level of the agent rather at the level of the authorised network.
Separately, Fos confirmed that it has increased its general levy for regulated firms to £23m for 2013/2014, up[ from last year’s £17.7m, as it confirmed its budget for the coming financial year had risen by 48 per cent from 2012/2013 to £283.6m.
It said it has attributed £177.1m of the budget to come from group fees. For the four largest banking groups, the Fos has introduced a group account fee which will help it avoid the need to increase its reserves.
Due to the increase in the case fee threshold, the amount of income coming from case fees is set to drop by close to half from £119.6m to £62.8m despite the case fee rising.
The PPI supplementary case fee will remain at £350 for 2013/2014 but the Fos said it will “consider afresh” the need for this fee and its level when its considers its PPI funding needs for 2014/2015 and beyond.
Fos said most stakeholders had “reluctantly” accepted the need for the PPI supplementary case fee to continue but they hoped that in future years the Fos would be able to make proposals to reduce or remove the fee.
The Fos also confirmed that it will be publishing Ombudsman decisions from 1 April 2013. The FSA has turned the proposals to require it to publish Ombudsman decisions into a formal, legal obligations.
