A majority of advisers believe the Financial Ombudsman Service’s adjudications are not fair, with even more stating they have experienced false accusations from complainants in an attempt to gain compensation, according to a survey conducted by Panacea Adviser.
The online portal for financial advisers and paraplanners received 183 individual responses during July and August, finding 58 per cent think that Fos adjudications are currently not fair, while a further 25 per cent described themselves as ‘unsure’.
Further questioning found that 86 per cent of advisers believe they are placed in a disadvantaged position from the outset of the Fos process, while 93 per cent said advisers should have the same right of appeal to the courts that complainants have.
There was also ongoing concern about the ability of complainants and claims management companies, to bring speculative claims, with no censure when claims are found to be false.
Fos has previously strongly rebuffed such criticism, publishing statistics last year, for example, that only 1 per cent of non-PPI complaints from third party claims management companies could be deemed frivolous or vexatious.
Of those who responded, 74 per cent reported manufactured accusations from complainants in an attempt to gain compensation and 90 per cent argued that complainants should have to produce tangible evidence to support their claim.
To counter such complaints, 83 per cent of advisers suggested the Fos fee should be paid by whoever has the case award against them, rather than always by the defendant.
Only 7 per cent of advisers surveyed believe the adjudicators and the ombudsman itself has a solid understanding of the issues they adjudicate on, while 93 per cent stated individual adjudicators should have both relevant experience and minimum industry qualifications.
Derek Bradley, chief executive of Panacea Adviser, said: “When we conducted this same survey back in 2011 – a pre-RDR, pre-FCA time – the results showed that something was seriously wrong with a system which was meant to be fair, open and honest.
“Three years on it appears that all is far from well at Fos and that something has to be done to restore confidence in a system that so many – not just financial advisers – see as wrong.”