Commenting on the consultation on consumer complaints from the Financial Services Authority and the Financial Ombudsman Service (FOS), Robert Sinclair, AIFA director, said: "Any proposal to increase the limit on awards made by the Ombudsman is not good news for firms.
“However, we should remember that IFA firms make up less than 2% of all claims so this will have a greater impact on other sections of the industry.
"This consultation does raise questions about the overall operation of the Ombudsman. With the current changes to the regulatory architecture there should also be a complete review of its role and accountability and we will be pushing for this as part of the Treasury consultation on the future of regulation.
"There has been a regulatory creep where the FOS has shifted from a dispute resolution service to an organisation that seems to act as both judge and jury. Its original purpose was to arbitrate to reconcile parties to an agreed solution on a fair and reasonable basis.
“Too often in recent times they appear to act in a quasi-judicial way. This is not a positive development for either consumers or the industry."
