A claims management company manager has come out fighting to defend his profession against criticism from Simplybiz chairman Ken Davy, saying the comments unfairly tar his whole industry with the PPI brush.
Tom Iveson from Get Claims Advice was responding a recent comment piece, in which Mr Davy condemned what he and many advisers refer to as ‘ambulance chasers’ - people who wait around after an accident looking for a way to benefit.
“What we have witnessed in recent years is the development of a whole new industry built on encouraging, and sometimes inventing, claims and grievances, purely for its own self-interest,” Mr Davy said.
Mr Iveson told FTAdviser he was willing to accept some criticism of his profession, but said Mr Davy’s argument was flawed in “lumping together the good, the bad and outright ugly” of the CMC sector.
“His criticisms of CMCs may well apply to the world of payment protection insurance, but when it comes to mis-sold pensions and Sipps the stakes are so much higher for savers, and the awareness so much lower,” he said.
Mr Iveson said there are “cowboys on both sides of the fence”. Criticism of what he branded ‘rogue CMCs’ missed the bigger issue, he said.
“Lumping in all CMCs together makes it difficult for the ones doing some actual good to make a difference,” he added.
“Many of our clients got hooked into their investment advice through a phone call out of the blue, so any criticism of the situation needs to start there, not with the people trying to provide a service that puts things right.”
The debate was reignited last December, after the Association of Professional Financial Advisers’ chairman John Gummer rallied against the increasing time and cost burden for advisers in having to deal with complaints brought to the Financial Ombudsman Service via CMCs.
Both Apfa and the Personal Finance Society then began a campaign demanding that CMCs disclose their fees upfront, to try and weed out the less reputable firms.
FTAdviser gave The Claims Bureau’s chairman Peter O’Donnell a right to reply at the time, who said companies like his give clients a chance to be heard in an industry where they have no representation.
Since then, there have been further Fos decisions published that were brought by CMCs and more importantly, the news that the government is making the Financial Conduct Authority responsible for regulating the industry.
CMCs have historically been regulated by the Claims Management Regulation Unit under the Ministry of Justice.
Mr Iveson said if advisers want to see an end to CMCs, they should follow his lead and “become a champion of clear, honest and transparent financial advice”.
He added: “If there’s no mis-selling going on in the market, then sure, we’re out of business, but we’d rather go down fighting against life-cripplingly bad advice, than wimp-out in a hailstorm of highly paid negligence at the expense of investor’s pockets, like so many IFAs later de-authorised by the FCA on these grounds.”