Financial Ombudsman Service  

Tavistock hits out at Fos's 'abuse of process'

Tavistock hits out at Fos's 'abuse of process'
 

Tavistock Investments has criticised the Financial Ombudsman Service's handling of the Bartlett fraud case, saying it is being subject to an "apparent abuse of process".

In the company's full year results statement today (September 26), the group said it has set aside £500,000 to cover costs of the Bartlett fraud case, whereby a former adviser was jailed by the FCA for defrauding victims out of £4.5mn which were used to fund his lavish lifestyle.

The company hit out at the calculations of the provisions, saying the determinations so far produced by the Fos contain a "familiar and depressing depressing mixture of loose analysis and selective interpretation of legal precedent."

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It said these provisions have been calculated through cases settled in the courts, with the objective of assisting complainants to recover their losses regardless of where the responsibility for those losses lies.

Over the past year, Tavistock added, the Fos has also taken it upon itself to split several individual claims into multiple claims, thus increasing the company's potential exposure. 

“It would be unreasonable to assume that Tavistock is the only firm in the industry being subjected to this apparent abuse of process,” it said.

“For this reason, potential remedial actions are being explored with the assistance of the company's lawyers.”

The group has also made a “precautionary provision” of £3.8mn in compliance with the FCA’s guidelines on past British Steel Pension Fund cases, which it said was in response to the mandatory, industry-wide review on the cases.

A spokesperson from the Fos said: “The Financial Ombudsman Service was set up by Parliament as a less formal alternative to the courts.

"Our role, set out in the Financial Services and Markets Act 2000, is to reach a fair and reasonable decision based on all the circumstances of each case.

"We do this by taking into account relevant law and regulations, regulators’ rules, guidance and standards, codes of practice and (where appropriate) what the ombudsman considers to have been good industry practice at the relevant time."

'Most successful year'

The group saw its gross revenues rise £5bn to £34bn in the year to March 31, boosted by its advisory business.

In the group’s full year results, released today (September 26), Tavistock said the revenues had contributed to the “most successful year in [the] company’s history.”

Gross revenues for its advisory business, making up 92 per cent of the group’s total revenue, rose 35 per cent to £31.3mn, and the group’s chief executive, Brian Raven, said the company is aiming to continue the "rapid expansion" of this part of the business.

"We aim to continue the rapid expansion of our advisory business and accelerate the growth of investment management assets. 

"The advisory business trades profitably in its own right, with high levels of recurring income allowing for confidence in future revenues.”

Average revenue contribution per adviser rose 22 per cent in the year, from £176,000 to £210,000.