Financial Ombudsman Service  

Cooperation and reform: What advisers want from the new Fos chief

Cooperation and reform: What advisers want from the new Fos chief

The new head of the Financial Ombudsman Service should work closely with advisers to ensure cases are judged fairly, advisers have said.

Responding to news that current chief executive Caroline Wayman has resigned, advisers called on her successor to show an appreciation for how the industry operates and make better informed decisions.

Although no successor has yet been named, advisers said a new chief should also accept that “significant reform” is needed, especially in terms of the qualification levels of ombudsmen.

Felix Milton, chartered financial planner at Philip J Milton & Company, said: “I for one have always found it uneasy that the FCA mandate an extremely high level of qualification with ongoing CPD requirements for advisers who provide advice on defined benefit pensions yet an ombudsman can rule on one of these cases without any of these qualifications. 

“I would also hope the ombudsman now works more closely with the financial planning profession to better understand how our industry works and how advice is delivered, in order to ensure that cases are judged fairly for both the consumer and the adviser.”

Addressing failures

Wayman’s resignation came after it was revealed that the ombudsman is facing a backlog of 158,000 complaints.

According to Money Mail, one in six complaints were over a year old and 11,648 dated back more than two years.

Martin Bamford, head of client education at Surrey-based advice firm Informed Choice, said the developments represented a “massive failure of leadership”.

He added it was only right that Wayman resigned and let a new CEO tackle the issue.

He said: “The failure has not happened overnight, and serious questions should now be asked about whether the Fos in its current incarnation remains fit for purpose.” 

This is not the first time the Fos has come under fire for its failures.

In 2018, the Fos came under pressure to review thousands of cases after a documentary by Channel 4’s Dispatches programme alleged some decisions may not have been fair to consumers.

An independent review later concluded there was no institutional bias against consumers but raised concerns about the knowledge of some of the investigators.

Tim Morris, independent financial adviser at Russell & Co, said: “I saw the rather damning Dispatches documentary. 

“These things will always highlight the negatives and won’t tell the full story, yet there are clearly some major issues. 

“With a line drawn on PPI and backlogs hopefully cleared, it's a good opportunity for a reset. 

“I think consistency is key. This would go some way to restoring adviser confidence in the Fos. We need more clarity and to be better informed about their decisions.”

Tough role

Some in the profession were more sympathetic as to how difficult it would be to lead the Fos.

Keith Churchouse, director and chartered financial planner at Guildford-based Chapters Financial, said although the level of outstanding cases was “disappointing” being CEO of this organisation attracted a lot of public scrutiny.