The Association of Independent Financial Advisers (Aifa) has placed its backing behind 'option H' for the future funding of the Financial Ombudsman Service (Fos), as this would in future see very few intermediaries pay case fees.
Although the Aifa still needs to examine the details of the Financial Services Authority (FSA) and Fos’s joint discussion paper on the future funding of the Ombudsman, it believes option H reduces the risk of small firms having to pay case fees.
Under option H, case fees would only become payable from the 11th and subsequent cases and there would be an annual fee per firm of around £230.
Chris Cummings, director general of Aifa, states: “Bearing in mind that around four out of five IFA cases are not upheld, this option significantly reduces the risk of small firms having to pay case fees for complaints made against them.”
Furthermore, he says large firms’ funding of Fos would be proportionate to the number of cases they produce, and the option would simplify the scheme by removing the need for fee blocks and tariff tables.
Cummings adds: “The large savings in costs for IFAs of payments to Fos and the Compensation Scheme, which our efforts are likely to bring about, significantly outweigh the cost of membership of Aifa. We need the industry’s weight behind us to achieve our goals.”
To read more about the FSA and Fos discussion paper see "FSA sets out Ombudsman future funding options"
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
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