Offering Britons targeted support and guidance under the City regulator's proposals will only work if the Financial Ombudsman Service is on board, advisers have said.
They warned unless professional indemnity providers and the ombudsman were fully aware of the distinction between advice and guidance, and were able to make sure that regulated advisers were not put on the hook for poor decisions as a result of unregulated guidance, the proposals set out by the FCA would not work.
The advice guidance boundary proposals, which were set out in 2023 by the FCA, have now focused around two particular elements: an advice/guidance boundary and a targeted support regime.
While advisers broadly support these proposals, as it will help more Britons become financially resilient, they have expressed concern that they could get caught up in any fallout if the measures are not implemented with proper safeguards for financial professionals.
In response to an FT Adviser article, one adviser wrote:
Another posted:
Their comments came in response to Consumer Duty Alliance chief executive Keith Richards', who told FT Adviser on October 3 that the proposals represented an "opportunity" for financial services.
When asked whether it would be making decisions based on the difference between advice and guidance, as outlined in the FCA proposals, a spokesperson for Fos said that, while it was "working closely with the FCA on its proposals", it was "too soon" for the Ombudsman to say anything further.
Fos complaints
Earlier this year, FT Adviser reported on figures from the Fos, which showed that complains about financial products rose approximately 70 per cent between April and June, compared with the same period last year.
Its data showed that Britons raised 74,645 cases with the complaints resolution service, often via complaints companies and ambulance chasers, about financial products between April 1 and June 30 2024, compared with 43,953 complaints reported in the same period last year.
While the ombudsman tends to uphold approximately 37 per cent of complaints, the vast majority, according to Fos, are not related to advised products, with the lion's share of complaints relating to credit cards, hire purchase and current accounts.
simoney.kyriakou@ft.com
