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Fos asks for adviser feedback on funding plans

 

The Financial Ombudsman Service has urged advisers for feedback on plans to split its funding evenly between case fees and the industry levy and any other issues they may have.

In its current consultation, published July 2, the Fos proposed to change the way it is funded from 85 per cent case fees and 15 per cent industry levy to a split of 50/50.

Appearing on the FTAdviser Podcast to answer questions posed by readers and listeners, Anna Whitelock, policy manager at the Fos, said: "The rationale for re-balancing the levy and the consultation is the culmination of a series of discussions we have been having over the last couple of years with various different stakeholders in the industry on how the ombudsman’s services are funded."

Fos funding will change in line with the complaints it deals with. While in 2019/20, the ombudsman expects to receive a total of 460,000 new complaints, of which 250,000 will be about payment protection insurance, this mix will change after the deadline for submitting PPI complaints (August 29, 2019) has passed.

Ms Whitelock explained: "We are planning for a service where PPI is no longer an issue.

"We have explained in the consultation how we think rebalancing the levy and case fee portions is going to enable us to do that."

She continued: "At the moment, we have a consultation on our future funding open, so if advisers are interested and would like a say, we would appreciate their feedback and their input into how any changes to our funding structure might affect them."

Advisers have until August 13 to let the Fos know how they feel about its funding structure.

Ms Whitelock said the Fos saw "very few complaints" about advisers and cited that "less than a half per cent of complaints came from financial advisers in the last financial year".

She also said: "When I'm out and about my experience is that the vast majority of businesses that I speak to have never had a complaint at all about their service."

Ms Whitelock also discussed why ombudsman staff are not required to be qualified to the same level as financial advisers and what it means for a client to be sufficiently aware of a financial issue, and whether it was right for professional indemnity insurers to increase premiums for DB transfer advisers.

On qualifications she explained that a lot of her colleagues would have already come from various areas within the industry.

She said: "They may have been financial advisers, or have worked for product providers within the pensions, investments or mortgage advice industry, or come from various other areas within financial services which would be connected to advice.

"So we already have an in-house network of experts and if we think we need outside help, we would call on that."

She added: "We also offer the opportunity for any of the casework staff who want it to do professional qualifications including those that advisers do."