PIMFA Condemns New 50:50 Funding Proposal in Consultation Response to FOS Funding
Wednesday 14th August 2019
PIMFA, the trade association for investment managers and financial advisers, responded yesterday (13th August 2019) to the Financial Ombudsman Service’s (FOS) ‘Our Future Funding’ consultation.
The new funding proposal from FOS is to split the costs 50:50 between case fees and the levy, the later cost being borne by all firms. The result of the new structure will be that firms which generate fewer complaints, will greatly subsidise firms which account for the majority of complaints to the ombudsman.
In the response, PIMFA has heavily criticised the proposed split, highlighting it as unfair and disproportionate.
At present, 85% of funds are from fees paid by firms for each complaint that is raised and 15% from a levy.
Ian Cornwall Director of Regulation at PIMFA said;
“We strongly disagree that FOS’s levy and case fee income should be rebalanced to 50:50 split. No financial analysis was provided in the consultation paper explaining how this decision was reached. The new proposal is unreasonable, and will penalise firms with a low level of complaints and provides little incentive for firms receiving a high volume of complaints to modify their behaviour and/or improve their complaint handling. FOS should rework its proposal so that the costs recovered by means of a levy are as low as possible. Further work is needed to address this issue.”
You can read the full PIMFA consultation response here.
Notes for Editors
About PIMFA – the Personal Investment Management & Financial Advice Association
- PIMFA is the leading trade association for firms that provide investment management and financial advice to everyone from individuals and families to charities, pension funds, trusts and companies.
- PIMFA represents both full and associate member firms. Full members provide a range of financial solutions including financial advice, portfolio management, as well as investment and execution services. They assist everyone from individuals and families, to charities and pension funds, all the way to trusts and companies. Associate members provide professional services to the PIMFA community.
- PIMFAleads the debate on policy and regulatory recommendations to ensure that the UK remains a global centre of excellence in the wealth management, investment advice and financial planning arena. Our mission is to create an optimal operating environment so that its member firms can focus on delivering the best service to clients, providing responsible stewardship for their long-term savings and investments.
- PIMFA was created in 2017 as the outcome of a merger between the Association of Professional Financial Advisers (APFA) and the Wealth Management Association (WMA) with a history as a trade association going back for 28 years – read more.
- Further information can be found at pimfa.co.uk
- To become a member of PIMFA for access to training, benefits and discounts, please visit https://www.pimfa.co.uk/become-a-member or contact us directly at [email protected]
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