Financial Ombudsman Service decisions uphold just 40 per cent of all cases brought against advisers, the chief ombudsman has said.
Caroline Wayman said she could understand why some advisers might believe the Financial Ombudsman Service (Fos) always comes down on the side of the consumer, but said the figures didn't back that up.
Speaking to FTAdviser, Ms Wayman commented : "We spend a lot of time trying talking to advisers to get the messages out there. I recognise that advisers, understandably, are concerned about this.
"In fact, we do not uphold all the cases that come to us against IFAs. We uphold about 40 per cent of these, so it is not the case that we side with the consumer."
Ms Wayman said the public availability of the Fos decisions has helped to make the decision-making process much clearer, and explained how Fos comes to a decision based on a wide range of evidence.
She said: "Our job is to decide what is fair and reasonable in the circumstances.
It is important to start with the customer experience and what is going to enable a really good conversation between an adviser and their clients."We look carefully at all the evidence, and this will include the recollections of the consumer and perhaps the recollections of the adviser, but it may also include the recording of the meeting and the fact finds and other key documents.
"We will look at all the evidence and decide what is fair based on all of the circumstances. It's not a question of us taking things on face value."
Ms Wayman also said the Ombudsman has had many good conversations recently with advisers and organisations such as the Association of Professional Financial Advisers about suitability reports.
She commented: "One of the key things is to resist the temptation to include everything, and to make sure it is as tailored as possible to the individual and their circumstances, as well as to keep an eye on length, because this does risk people not reading them."
According to Ms Wayman, the important thing is for advisers to make sure the customer understands the advice given and what they've got.
This would be better than having a rigid template put in place for advisers to follow when completing suitability reports.
Also, instead of focusing on all the recommendations that were discounted during the advice process, she suggested: "Focus on what the customer needs to understand, rather than putting in everything just in case it is something Fos or the regulator has to look at later.
"The important thing is for the customer to understand what they have got in the first place."
Ms Wayman also said some advisers had raised concerns over the costs involved in the recording of client conversations, which was something for the FCA to look at.
There is an obligation under Mifid II to record phone conversations. Currently, under Mifid II rules, which came into force on 3 January 2017, anyone making a call in which they recommend products or aim to make a 'transaction' will have to record that call and save the recording for five years.
In October 2016, FTAdviser reported this could extend to all financial advisory firms.
Ms Wayman said it would be "helpful" for an adviser to have recorded conversations where available, but there were other ways of being able to pull together the information when it came to making a decision.
"We talked about recording all conversations with clients recently", she said. "One adviser at one of our events recently said his firm was already doing that, and another adviser around the table was expressing concerns about that.
"I think it is important to start with the customer experience and what is going to enable a really good conversation between an adviser and their clients, one that really helps to ensure the client gets what they are looking for, and they understand what they have got."
simoney.kyriakou@ft.com
