FCA's latest thinking on longstop

FCA's latest thinking on longstop

The Financial Conduct Authority (FCA) has reiterated its stance that it will not introduce a longstop for financial advisers.

Speaking at the regulator's annual public meeting yesterday (11 September) Christopher Woolard, the FCA's director of strategy and competition, said he empathised with advisers but said the position had not changed.

But Mr Woolard did acknowledge that the issue would probably be reviewed in years to come.

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The issue of a longstop preventing complaints from going to the Financial Ombudsman Service after a time period - usually cited at 15 years - has been a long-running issue for financial advisers.

The FCA last looked at the issue during the Financial Advice Market Review (FAMR) when it concluded it would not implement one because the number of complaints which would be timed out would have been what it deemed small.

Mr Woolard said: "If you think about the nature of the services provided, and the nature of the market, one of the features you find when you look at the issue of the longstop is the ability to know you have got a product that was the one you were sold often only becomes clear later.

"When we looked at the longstop as part of the FAMR we looked at where to comparable professions sit. If you look at doctors, lawyers and accountants, they do not benefit from a longstop in respect of complaints about their services.

"Ultimately that review concluded that relatively few complaints actually fell into this category and on balance the review concluded that in terms of public interest it would be inappropriate to introduce a longstop.

"We are still going to come back to that in years to come. We will look at whether the outcomes of the FAMR over time.

"At the moment the issue is one we have looked at very closely and come to a conclusion the line is probably drawn in the right place at this moment, but we understand the issues you have raised."

Figures from the Fos out in May showed the number of complaints against financial advisers, and the proportion of complaints being upheld, has been going down over the past four years.

The number of complaints lodged 15 years or more after the advice was provided was also decreasing.

The FCA has previously said it will review the case for a long stop in 2019 as part of its wider review of how the FAMR has panned out.