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Walter Merrick, chief ombudsman for the Financial Ombudsman Service, has paid tribute to the work of liaison groups and urged against abolishing them.

In the ombudsman's latest newsletter, Mr Merrick compared representatives of trade bodies who worked to provide a two-way channel of communication between the ombudsman and trade bodies, to "unsung heroes", praising the unpaid work they did in building relations.

Currently the ombudsman has three liaison groups covering insurance, investment and banking and loans. Trade associations nominate members to act as liaisons and chair meetings with the Fos and the groups typically occur on a quarterly basis, with the trade bodies’ nominated liaison members setting the agenda.

He said: "Each of these liaison groups has worked well over the last eight years. They function as a useful forum - enabling industry practitioners and senior representatives of the ombudsman service to exchange information and to update each other on current issues."

Pointing to the non-sexy image of the role, Mr Merrick was keen to highlight the valuable role they played.

He said: "Serving on these groups is not the stuff of great excitement, nor, I suspect, does it lead to recognition or promotion for the industry members involved. Indeed, I wonder how many practitioners across the financial services world are aware of the work these groups carry out."

However, Mr Merrick recognised that as with any group, they were not immune to scrutiny.

“No doubt there are ways in which their operations might be improved – but in his recent review of the ombudsman service, Lord Hunt has suggested that they should be abolished and that their functions could be transferred to the Financial Services Practitioner Panel and the FSA's Smaller Businesses Practitioner Panel. These panels have heavy agendas, mainly concerned with the work of the FSA. So I am not sure they would have room for our business. And, by their nature, these panels have to be generalist in their approach.”