The Association of Professional Financial Advisers is conducting research and compiling a database examining recent Financial Ombudsman Service decisions on adviser cases.
Caroline Escott, senior policy adviser at the industry body, told FTAdviser that while initial findings are currently still confidential, they are concerned that there appear to be “systemic problems” with Fos decision-making in terms of their scope and jurisdiction, the training and guidance provided to adjudicators, and adjudicators’ accessibility.
“This is having both a direct and indirect effect on our members, including through the impact on professional indemnity insurance premiums,” she commented, adding that Apfa is engaging with the Fos informally on this and feeding through members’ input.
A spokesman for the Fos said they were not taking part in any formal process on this subject with Apfa, though they regularly talk to each other about any member concerns.
“We aren’t working on anything jointly though. In terms of our decisions, we’re confident that there aren’t ‘systematic problems’ – we do publish them all, after all.”
Neil Liversidge, managing director of West Riding Personal Financial Solutions and Apfa council member has also recently launched a petition to require the Fos to “adhere to common law”.
The petition said: “We the undersigned have no confidence in the Financial Ombudsman Service. It has a track record of issuing judgements that are contradictory, illogical and made with hindsight. We call for it to be subject to common law and for all its decisions to be approved by a suitably qualified judge.”
The petition references a recent decision by the High Court which ruled against two Fos final decisions which upheld fraudulent complaints against Cirencester Friendly Society.
The society proactively asked the court to set aside the two awards arising from Christopher Parkin’s complaints to the Fos and declare that the awards were not enforceable.
The latest in a long line of adviser disputes with the Fos came last week, as an adviser railed against a recent decision that ordered his firm to pay more than £1,000 towards an individual, as he categorically stated the fees his firm received were for advice given by a previous adviser.
At an Apfa seminar earlier in July, director general Chris Hannant spoke for members when pointing out that a common complaint about the Fos was around inconsistency in how complaints and evidence gathering is dealt with by adjudicators and ombudsmen.
Elsewhere, Apfa’s manifesto for financial advice continues to see Ms Escott meet with members of the new parliament, with the Financial Conduct Authority’s paper on Financial Services Compensation Scheme funding arrangements being a key focus.
She explained that they have already had discussions with the Financial FSCS on this issue – including with chief executive Mark Neale at a recent council meeting – and are working with members at the moment to think about what the best alternative to the existing levy approach.
“It’s clear that the current funding arrangement is unfair to the advice industry and provides insufficient stability when it comes to advisers’ business planning, so we’re hoping that this autumn will provide an opportunity to change the system for the better.”
Finally, Ms Escott said that Apfa is contributing to the Work and Pensions Select Committee inquiry into the guidance and advice available to people navigating the new pension freedoms.
“It’s great that policymakers seem to be aware of the need to place advice at the heart of the pension reforms, but we’re keen to see a clear and well-understood division between ‘guidance’ and ‘advice’.
“We’re aware that our members are currently working on solutions to ensure greater consumer access to professional advice where they need it, but the government and regulators all need to play their part too,” she added.
peter.walker@ft.com
Additional reporting by Donia O’Loughlin
