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FOS chief: follow FCA guidance to avoid complaints on DB transfers

FOS chief: follow FCA guidance to avoid complaints on DB transfers

It is almost three years since Caroline Wayman stepped into the hot seat as chief executive of the Financial Ombudsman Service (FOS) and amid the thousands of daily payment protection insurance claims has found time to address advice.

Wayman is taking a proactive approach to engaging with financial advisers, and has been holding roundtables with IFAs around the country.

She wants to convey a clear message: as long as IFAs give suitable advice in the customer’s best interests, they have nothing to worry about. She wants adviser who are confident in their original advice to be ‘front-footed’ when dealing with any claims against them. 

A lot of advisers are concerned about possible claims over DB transfers. Are they right to be worried?

The important thing is to be clear about the advice. Make sure it is suitable for that particular individual. In particular make sure people understand what they are giving up. People do not always understand what they are giving up and what they are moving out of.

Do not put War and Peace into the suitability report in an effort to cover your back now for future things. If you are putting things in that are not relevant to that customer, that does not help because you increase the chances they will not engage with it.

Advisers have nothing to fear from the FOS if they give suitable advice, so do that and make sure you follow Financial Conduct Authority (FCA) guidance.

Are you seeing more complaints against Sipp providers?

We have seen a bit of growth in Sipp complaints so it will be one to keep an eye on. We take account of the whole circumstances about who is involved and who did what. But if you are a regulated firm providing a regulated activity, we have to look at where those obligations have been met.

That is not the same as advice. It is not to uphold them to that standard [of advice] but it is to say “what did you do that amounted to due diligence?” That is a very careful judgment; looking at the circumstances, thinking about the FCA rules and putting that all together and saying “did they do enough?”

What other complaints trends are you seeing?

Some savers need to get advice because of the size of their pot but are struggling to find an adviser. And even when advisers have told them not to do something they are not happy about that. They are not huge numbers but they are being talked about.

Annuities is also an area we are keeping an eye on. Enhanced annuities [is an area] where we have seen a few more complaints because there has been some backward looking activity.

If an adviser does receive a complaint, how should they handle it?

If an adviser is completely confident in their approach, the best thing for them to do is say: ‘We treated the customer fairly and here is why’.

The worst thing to do is pay off an unmeritorious claim to make it go away, which occasionally people tell us they are tempted to do, but actually that feeds the beast.

If there are complaints it is really important to be front-footed in your response and say: ‘No, we believe we treated our customer fairly’.

Do you have a financial planner?

Yes. I am always telling people about the importance of keeping on top of your finances. So I have to practice what I preach.


Caroline Wayman

2014-present - Financial Ombudsman Service, chief executive and chief ombudsman

2011-2014 - Financial Ombudsman Service, legal director

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