Financial Ombudsman Service 

Ombudsman on ‘get out of jail’ card for insistent clients

Ombudsman on ‘get out of jail’ card for insistent clients

The Financial Ombudsman Service has urged advisers who deal with insistent clients to get these individuals to put their intention in writing and tape them.

Caroline Mitchell, lead ombudsman at the Financial Ombudsman Service, revealed at the FTAdviser Unpackaging Pensions event yesterday (4 October) the type of evidence that can make sure insistent client complaints against an adviser are swiftly thrown out.

She said: “If it is there [that they wish to proceed with a transaction despite the adviser’s advice] in their handwriting then when the consumer comes to me 10 years later they will be very much on the back foot.

“There is never a get out of jail free card but that [a handwritten note] should be OK.”

Tackling making sure every potential issue that could arise is covered, Ms Mitchell said compliance consultants were wrong to suggest if you do not put everything in a suitability report then the ombudsman will rule against you.

She said the ombudsman did not expect clients to grasp a 100-page plus suitability report.

Speaking to a packed room of financial advisers at FTAdviser’s event, sponsored by Aviva, Ms Mitchell recalled a report that had 20 pages on the lifetime allowance that was sent to a client with a pension pot so small that they were never likely to trigger it.

She said: “It confuses the consumer, takes up space and is all counterproductive.

“You make it as a tailored towards them as you can.”

Reflecting on Mifid II requirements that certain types of calls should be taped, Ms Mitchell said while it wasn’t her job to tell advisers what to do – that is the Financial Conduct Authority’s job – it was wise to tape conversations.

She said: “I have talked a lot about Mifid and the taping requirement.  I know it won’t be necessary for everything. I know there is concern it might put up a barrier but think about it from our point of view. That is just the most brilliant evidence.

“A tape recording is wonderful. A consumer will say nobody told me but if they are told on the recording then that is the end of it.

“I am not telling you what to do but I am saying taped evidence is brilliant.”

Philip Bower, Chartered financial adviser at Elementary Financial Planning, said there needs to be an element of buyer beware brought to financial advice.

He said: “I think we find ourselves in a situation where your GP has to licence you to smoke cigarettes. Isn’t it time to being back caveat emptor?”

John Lawson, head of financial research at Aviva, said people should be able to make their own financial decisions but on their own head be it.

He said: “If you have decided to do this against the advice of the financial adviser then that is fine so long as the responsibility lies with them.”

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