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

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

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.

Churchouse said: “This pressure will only have increased as the pandemic took hold and individuals lodged more complaints, whilst working practices will have had to evolve, such as working from home. To remain in post for seven years is I believe a testament to her work.  

“Looking forward, clearly a swift review of the working practices [and] outstanding cases will be required to ensure that confidence in the Fos remains firm.” 

Scott Gallacher, chartered financial planner at Leicester-based Rowley Turton, said: “I hate to see people lose their jobs but in any organisation the buck should stop at the top. 

“Consequently, given the backlog and that she has been in the role for quite a considerable time, I think it’s right that she has chosen to go.” 

BSPS backlog

Others said they hoped Wayman's successor will be able to address the backlog of complaints relating to the British Steel Pension Scheme.

Clarke Willmott acts for 700 former members of BSPS who have complaints against their advisers.

Mamunul Wahid, solicitor at Clarke Willmott, told FTAdviser that since September 2019, it had referred over 150 complaints to the Fos but is yet to receive a single ombudsman decision and some still haven’t had an initial outcome at investigator level. 

Wahid said: “In that time, we have witnessed responding firms either phoenix or lifeboat into existing business structures or otherwise dissipate assets. 

“We welcomed Ms Wayman’s thoughts when she told MPs that the service hasn’t made the progress it would have liked in these cases and hopefully her successor will ensure this is addressed. 

“As a starting point, perhaps her successor will commit to reducing the seven months the ombudsman says it takes for a case handler to be assigned to a pensions case. 

“We know the industry, just like steelworkers, will want transparency over what happened in South Wales, Lincolnshire and Teesside. The ombudsman has an important role to play here so that the same mistakes are not made again.”

amy.austin@ft.com, additional reporting by Aamina Zafar

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