One support services provider has recently flagged the decision to raise the professional indemnity insurance claim limit on the Financial Ombudsman Service to £150,000 as an inappropriate response, sources say.
Support services provider, Tenet, remarked that the decision could have an impact on professional liability insurance excesses and premiums because of the the heightened redress costs. The Financial Services Authority has already issued a statement denying such a possibility from occurring.
Tenet also made it a point to note that the FOS is the only UK regulatory body where there can be no challenge made to a final decision. Citing inconsistencies in previous rulings, Tenet also pointed out that there is no appeal process for a decision handed down by the FOS, something that could lead to increased commercial insurance premiums.
The support services provider also questioned the qualifications of adjudicators to make such decisions. Tenet referred to Natalie Ceeney, the current Chief Ombudsman, as a former head librarian, intimating that she lacked the expertise necessary to make such critical business dispute decisions.
Tenet distribution and development director, Keith Richards, remarked that advisers need to be treated fairly as much as consumers need to be provided with an appropriate channel in which to pursue complaints in a just and timely manner. There are some changes to the rules regarding complaint handling that Tenet considered sensible, added Mr Richards, but there are additional elements that can only further challenge the already embattled financial services marketplace.
The FOS replied to the criticism by remarking that out of the complaints resolved by it, only approximately 0.2 per cent related to payments in excess of £100,000. It further reminded the industry that no more than 1.5 per cent of all of its total complaints were against IFAs.