The admission be seen by some as an indictment of the quasi-regulatory powers that the service has come to embody, particularly in its retrospective judgements relating to advice suitability that can appear to amount to de facto rules as to how client’s should be risk assessed.
In one example, an ex-adviser said Fos’s ruling amounted to “poor advice” in itself as he was ordered to pay redress to a client despite having placed him in a drawdown product that he claimed performed better than the index-linked annuity that was judged to be more appropriate.
Other advisers have criticised Fos for ruling against intermediaries in some cases on the basis of a client’s apparent lack of risk tolerance, despite evidence that full risk assessments were carried out and that the client was classified in a commensurate risk category for the investment.
Ms Ceeney outlined the differences between the regulator’s role and its own in the newsletter, which is targeted predominantly at consumers, stating that it does not “fine or discipline” individuals and focuses on providing a “cheaper alternative to the courts” for individual disputes.
She added that its interests were “aligned” with the regulator and praised the “pragmatic” approach of the Financial Conduct Authority, which took over conduct regulation from the Financial Services Authority last month.
Ms Ceeney said that the “light-touch” regulatory approach of the FSA had been at least in part to blame for past failures, including scandals such as PPI.