Independent financial advisers believe Ombudsman is 'ripe for review'
By Peter Carvill
The Association of Independent Financial Advisers (Aifa) has called for the structure, processes and charges of the Financial Ombudsman Service (FOS) to be given a radical overhaul.
Following the Hunt Review of the FOS, Aifa outlined a list of changes including the creation of a small firms division; access for smaller firms to an oral hearing; and the charging of complainants for bringing cases of no-merit.
Chris Cummings, director general of Aifa, said: "The Hunt Review has been set up to consider issues of transparency and access for consumers, but small firms that get few complaints often find themselves in the same vulnerable position as consumers because of FOS bureaucracy, which is why we need a small firms division. Ombudsman systems were intended to be a cheap and easy resolution service. The FOS is turning into an expensive and long-winded bureaucracy and is ripe for review."
Aifa's call for an urgent reorganisation of the FOS follows the third-yearly external review headed by Lord Hunt, which focused on the openness and accessibility of the Ombudsman service in relation to its customers and stakeholders. The review looked particularly at whether the service should be more visible in its dealings with the public, and whether it made adequate use of the information it acquired.
In response, David Cresswell, head of communications at the FOS, said Aifa was just one of many organisations making recommendations. "I suppose what is going to matter is Lord Hunt's reaction because this isn't a submission to us," he said.
"It will be his job now to look at his views and opinions, including those which disagree with Aifa. He will report to our board and they will make any decisions they need to make in light of any recommendations."
Aifa's declaration came as Neil Barlow, an insurance broker, raised concerns that the regulatory bodies for the protection industry were operating with double standards.
Barlow, who works for Harbour Insurance Brokers, has revealed that no investigator has been assigned to a complaint he lodged with the FOS in October 2007.
Barlow said: "The insurance industry funds these bodies and they're just not performing."
The FOS said most complaints were resolved within three months and the time taken to allocate Barlow's case has taken longer than normal. It apologised to Barlow for the delay.
