The offshore trade association aims to mediate any disputes that arise in the industry
A trade association for offshore financial services companies will be set up in January 2002 along with an ombudsman to provide a dispute resolution service to both members and non-members.
The aim of Ofta, the Offshore Trade Association, will be to increase the quality of the offshore financial industry, improving its reputation through an agreed set of standards and an active mediation service.
Ofta will be a Bahamas- registered company, run out of Malta, while its associated ombudsman will have an office in London.
Ofta will have a largely professional board as well as an elected council. Its general manager, Lee Marks, is a consultant in the offshore industry and a broker. He became interested in developing an organisation like this and approached Stephen Kerbel to be the Ombudsman, then went out and found the initial funding, primarily from offshore brokers.
Both Marks and the chairman, who is almost certain to be a UK barrister, are based in Malta.
Ofta has as its primary responsibility the funding of the ombudsman. Kerbel said: 'If the ombudsman fails because it is not strong enough and does not get a good enough reputation, the association fails completely ' it is only a talking shop at that point.'
The ombudsman is looking to become self-financing through the provision of freelance dispute resolution for non-members.
Kerbel said: 'Life offices who are not Jersey/Guernsey/Isle of Man-based do not have a bureau for dispute resolution. They would be delighted to have somewhere they can offload their disputes.'
Mediation will be free for the clients of members at least for the first year, although if there is a huge demand, it may become necessary to charge.
Membership fees will be set at £375 pa and Kerbel hopes to attract 500 members in the first year, increasing to 1,500 by the end of the second, as the organisation's momentum increases.
The Ombudsman service will also have a supervisory commission. Although names are yet to be officially released, it will include a barrister with expertise in consumer affairs, someone with a political and journalistic background to represent the general public interest, plus two members of the Ofta council.
'A trade association must be something of a talking shop, but it also has to have teeth and it has to work and it has to regulate the standards of the membership,' said Kerbel.
Part of Ofta's remit will be to lobby for the industry, although initially Kerbel will probably take responsibility for that.
Ofta's board will control finance and membership rules.
'These are decisions that should be taken out of the hands of any part of the organisation that could corrupt it,' noted Kerbel. 'The council may have a dominant figure in it, who, over time, may corrupt it.
'I am vetting the membership over here, but I can not assist in who is being proposed for membership. I can only vet them once their application is in.
'The board is going to be chosen by personal contacts to locate the right sort of people. Those that have provided the funds have the final sanction on who is the chairman ' it's got to be someone appropriate for them and they are paying for it and so that is fine.
'They will appoint a local firm of chartered accountants to take the finance director post on the board.'
Board changes will be then in the remit of the council, but the original funders will continue to have a role.
The bulk of the money that was sought did not come in from the life offices. Initially it was from the large broker firms who saw an immediate advantage to being involved, according to Kerbel.
'The reason people will join the association is not only because they enhance their own professionalism,' said Kerbel. 'But also because this question of disputes resolution. If you are able to overcome that particular sales difficulty, you increase the number of sales you make.'
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