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ombudsman news

issue 146

November 2018

Q&As

what’s on the table?

Each year we meet small regulated financial businesses across the UK to share our experience of complaints handling and to answer questions about our role.  In 2016, following the FCA’s Financial Advice Market Review, we started running regular roundtable discussions specifically for financial advisers, hosted by our chief ombudsman and attended by representatives from the FCA.

Building on our existing engagement with the advice sector and its trade associations, these events provide a forum for discussion about financial advisers’ perspectives on the ombudsman – as well as about wider issues affecting their sector.

Anna Whitelock – a manager in our stakeholder team – gives an overview of the issues that often come up at our roundtables, and answers the questions we’re most commonly asked.

“what support do you provide for financial advice businesses?”

While we’ve met thousands of advisers at our UK-wide events over the years, some have only recently become aware of our engagement work – and don’t know about the full range of support we offer. 

For many years, we’ve run introductory workshops across the UK for businesses who have very few, if any, complaints referred to the ombudsman service – which often includes financial advisers, but also small lenders and brokers. In contrast, our roundtable discussions are aimed specifically at financial advisers, helping to focus on what really matters to them. They’re a chance to talk to our chief ombudsman face to face, and have the ombudsman and FCA together in the discussion.

We’ve also created a page for businesses, which brings together links to the online resources we have available, including our technical notes about different financial products and services we cover, and our database of ombudsmen’s final decisions. If you’re interested in meeting us, it’s worth keeping an eye on our website, where we list our upcoming events for businesses.

And if businesses have a question about a particular complaint that hasn’t yet been referred to us, or about the ombudsman service more generally, they can contact our technical advice desk for informal support. It’s open Monday to Friday from 9am to 5pm, on 020 7964 1400 or at technical.advice@financial-ombudsman.org.uk.

“how do you make sure your decisions are consistent?”

When we’re looking into a complaint, we want to reach an answer that’s fair and reasonable in the individual circumstances.  As you’ll know from your own customers, while some people’s circumstances may have similar qualities, no one’s life is exactly the same as someone else’s.  And those individual differences may mean that we suggest different outcomes in complaints that, on the face of it, involve the same broad issues.

When we resolve complaints, we keep our approach consistent. This involves the key questions we ask, the way we investigate, and the context and background to each case.  As well as publishing guidance on our website and regularly sharing illustrative case studies, we publish all our ombudsmen’s final decisions – so people can see how our approach plays out in real-life individual circumstances.

We put considerable resources into monitoring the quality and consistency of our case handling at all stages. Our practice groups, made up of experts from across our service, also help ensure we’re approaching issues in a consistent and fair way – which is especially important where the financial products and services involved are new, or where we’ve spotted new trends in an existing area.

“I’m concerned you apply today’s standards to advice given in the past – and why isn’t there a long stop to prevent old complaints?”

Our rules require us to take account of the law, regulators' rules, and industry good practice at the time of the events concerned. If you don’t think that’s happened, then please talk things through with us – so we can explain our thinking and point you to the rules or guidance we’re looking at.

Financial products are often long-term contracts. And a problem – for example, with suitability – might not come to light until much later down the line. Even so, there are time limits for bringing a complaint. Generally, we can’t look into events that happened more than six years ago – unless the person involved contacts us within three years of realising they might have a reason to complain.

It’s understandable that the prospect of dealing with a complaint about an event that happened some years ago could be worrying. However, we weren’t able to consider more than half the 300 or so complaints we received last year that involved events that happened more than 15 years ago – which would have been caught by a “long stop”. And of those we did investigate, we upheld just 27% – less than the average proportion we upheld against financial advisers.

“my customer complained to you – and even though they didn’t win their case, I still had to pay a case fee”

In summary, businesses don’t pay a case fee for the first 25 cases they get in a year.  And so it’s unlikely that you’ll have paid a case fee for your customer’s complaint. In fact, each year more than nine in ten of the businesses whose customers complain to us don’t pay any case fees.

We’ve always tried to ensure our funding arrangements are fair, with the businesses who account for most of our work paying relatively more towards running our service.  We consult publicly on our plans and funding before each new financial year begins. And you can read more about how we used the funding we receive in our annual report and accounts.

“if my suitability report isn’t perfect – or I can’t find a certain bit of evidence – am I certain to lose the case?

Clear documentary evidence of advice, such as a suitability report, is generally going to be a very useful piece of evidence if it’s available. But it’s only part of what we’d consider when reaching a decision in a complaint about financial advice.

We recognise that – for all sorts of reasons – certain paperwork might not be available, or isn’t as robust as, in hindsight, you would have wanted it to be. We’ll take into account the relevant law, rules, guidance and good practice at the time of the events concerned, and build a picture of your customer’s circumstances. And then we’ll decide whether – weighing everything up – your customer has been treated fairly.

There’s no solution to “complaint-proof” every piece of advice a business gives. But if they’re giving appropriate, tailored advice, treating customers fairly and clearly documenting the conversations they’re having with customers, there should be no problems with the ombudsman.

“what’s your approach to complaints involving financial advice and new products like social impact investing?”

In the FCA’s call for input about social impact investing in 2016, some respondents expressed concern about the possibility of complaints coming to the ombudsman. We’ve been asking advisers about their experiences involving these types of investments – although most advisers we speak to haven’t advised customers about them. But we’ll continue to monitor this area and share any insight we have.

In general, however, as with other suitability-related complaints, key factors include how the risks or benefits of an investment option or strategy have been explained. So if we were to receive a complaint about this type of investment, we’d consider whether the advice given was clear, fair and not misleading.

what do advisers say about our roundtables?

“Having representatives from both FOS and FCA gave an insight into how both organisations view a case/situation which was really valuable.”

“Generally very open and honest views from both FCA and FOS.”

“I would happily have continued the discussion for much longer because it was so interesting and beneficial.”

“I thought going round the room asking for input was again very brave but handled extremely well by Caroline Wayman, and enjoyed that format.”

“It was a useful insight into how you work and think.”

“I would like to see more of these types of workshops; anything that builds relationships between the two "sides" has to be a good thing.”

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ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.