As a youngster, my big treat of the week was a trip to the local cinema for the Saturday matinee.
In those days, unlike today, you always knew who the bad guys were, as they were the ones in the black hats, the good guys wore white hats.
Unfortunately, today when it comes to Fos trying to figure out who the good guys are, they do not have the luxury of looking for the ‘white hats’.
Nonetheless, the latest Fos report gets pretty close to defining the ‘Good Guys’ which, I am delighted to say, is the IFA sector. Fos received 329,509 complaints in 2015, of which only about 1 per cent were for IFAs.
By any measure this is a fantastic result, but even more so when you consider that the IFA sector has such a massive share of the market.
Add in the reality that only about 40 per cent of complaints against IFAs are upheld – fewer than 1,300 last year. For advisers, this means barely two complaints in a 30-year plus career, a record which I am sure is the envy of other professions in today’s litigious world.
Last year, a spokesman for Fos said: “The ombudsman has always highlighted the benefits of independent financial advice, tailored to an individual’s specific needs when people are considering purchasing products such as an investment or pension.”
The fact remains, however, that even one complaint is one too many, so, while we can be proud of our record we cannot afford to be complacent.
This is particularly relevant to pension freedom and a recent High Court ruling.
In this instance, the judge overruled the Pensions Ombudsman by saying that a client who wanted to put her pension money into what appeared to the insurer to be a very dodgy deal, should be allowed to do so.
Even one complaint is one too manyFrankly, I am appalled at this decision. I hear the cries of, “It’s her money, if she wants to throw it away on a dodgy deal so what”, and equally, claims that the High Court was simply following the law.
Nonetheless, I believe that society at large, and particularly financial advisers, have an absolute responsibility to protect people from themselves.
Tens of thousands of people are currently using pension freedom to spend their savings, and we can expect many to be back in a few years claiming from Fos and the FSCS for advice they either never had or simply ignored. IFAs are rightly recognised as the ‘good guys’ but it seems we now need to watch for dodgy judgments as well as dodgy deals.
Ken Davy is chairman of SimplyBiz Group
