Last week Damian Fantato, FTAdviser’s deputy news editor, interviewed Caroline Wayman, the chief executive of the Financial Ombudsman Service.
Her appearance and comments produced a surge of outrage and, in some cases, pure bile from a section of the advice community. Naturally the bile came from those hiding behind pseudonyms.
Asked about how decisions are arrived at, she made it clear they did not take things at face value, instead they looked at all of the evidence including recollections from both sides and record keeping. She also confirmed that only 40 per cent of cases against IFAs were upheld.
Naturally the bile came from those hiding behind pseudonyms.You might have thought this would be welcomed as evidence of a balanced and fair approach.
But no. Completely ignoring what she said, one adviser expressed outrage that advisers should have to record what is said while their client can rely on memory.
“With time and a selective memory 4 in 10 succeed.” Presumably this adviser believes that the customer is always wrong.
Another was outraged that advisers have to pay for Ombudsman cases.
One mentioned complainants lying and taking opportunistic stances – what a bunch of misanthropes you have in your ranks.
Well, let’s get this in perspective. You are running businesses. You have a duty of care to your clients, they do not have one to you.
You are their adviser operating in a regulated industry. Of course you should keep comprehensive and accurate records.
They are consumers, sometimes with little understanding. Of course they will sometimes get the wrong end of the stick.
What would you have instead of the Ombudsman – a system in which every single case must go to court with all the extra work and costs that would involve?
Perhaps you would prefer a system in which every complaining client can be given a boot up the backside and shown the door?
The Ombudsman offers a relatively inexpensive, fair and efficient way of resolving disputes where trust has broken down between a business and its client.
For those who make the effort to read its newsletters and rulings, it can offer a touchstone as to how disputes should be approached.
And, while you might not want to accept this, having a strong Ombudsman service gives credibility to the financial services sector and can help to increase confidence among consumers.
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Don’t panic, Mr Mainwaring!
Inflation’s back, Captain Mainwaring. Don’t panic! Don’t panic!
I could almost hear Corporal Jones’s trademark shouts in some of the commentaries published after last week’s announcement that CPI was up to 1.6 per cent – slightly more than the 1.4 per cent that had been expected.
But let’s not forget that a little inflation can do you good, especially in an economy driven by consumer demand.
Consumers are supposedly more likely to buy today if they fear the price will rise tomorrow.
Borrowers could do with a bit of inflation to eat into their enormous debts.
At the end of October, the average household owed £55,855, including their mortgage.
Looked at another way, the average adult owes £29,862, which is more than 113 per cent of average earnings.
There was £66.2bn outstanding on credit cards alone. Something tells me that will have increased over the Christmas period.
And let’s not forget all that long-term government debt borrowed at low rates.
And inflation can be a sneaky way of way of reducing wages so long as employers can hold wage growth below inflation levels.
For the financial industry, inflation is no bad thing either. Investors wanting to stay ahead of inflation should continue looking to the stock market.
So let's not panic just yet.
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A new breed of claims chaser
I was intrigued by a recent online comment from an adviser who appears to have been dropped on a typewriter at his or her christening judging from the random bunch of letters that makes up their name.
This mentioned a complaint – of which the client claims no knowledge – coming from an ambulance chaser.
I have come across cases in which people have had PPI claims put in without their knowledge. A cold-caller chats them up and gets the policy details and simply puts in the claim without permission.
But I have not come across this with IFAs before. It may, of course, be that the client in question had given all the details to the claims handler, including permission and was rather embarrassed when the IFA called.
On the other hand, if the client did not have knowledge of the impending claim then that is a rather worrying development.
Tony Hazell writes for the Daily Mail's Money Mail section