Professional Adviser sits down with Ahmed Bawa
The Financial Ombudsman Service (FOS) is facing renewed scrutiny following an open letter sent to the Treasury’s economic secretary Emma Reynolds MP, by Rosemount Financial Solutions CEO Ahmed Bawa. In an exclusive interview with PA TV’s Advice Lens, Bawa expanded on the concerns laid out in the letter, arguing that the FOS is not just misaligned with the regulatory growth ambitions of the Financial Conduct Authority (FCA), but is actively acting as “a bottleneck to innovation and confidence in the advice industry”.
He argued that the FOS is enabling a wave of opportunistic, unfounded complaints that are being weaponised by claims management companies (CMCs) at the expense of financial advisers.
"We're witnessing a siphoning of resources from real financial advice into the hands of third parties exploiting a broken system. These firms are flooding the FOS with non-specific complaints that drain the energy and finances of advisers who've done nothing wrong," Bawa said.
‘A quasi-regulator with real-world consequences'
In the letter, Bawa outlines how the FOS's current approach is creating "a lack of confidence in the British financial services sector." He suggests that its operations now resemble those of a quasi-regulator – yet without the accountability or structure typically demanded of one.
"It's not just about the odd complaint being mishandled," Bawa told PA TV. "It's about a systemic culture that puts advisers on the back foot. There's a presumption of guilt before proper due process, and that's deeply damaging for small firms trying to navigate a heavily regulated landscape."
A crisis for smaller firms
Bawa warned that the greatest burden falls on sole traders and smaller advice firms, many of whom lack the legal and administrative firepower of larger networks.
The result, he said, is an exodus from the profession. "We've lost nearly 5,000 financial planners in just six years. It's no wonder – who would want to join an industry where your good work can be reversed by one baseless claim and a rigid bureaucracy?"
FCA's efforts undermined?
The letter references HM Treasury's policy paper "New approach to ensure regulators and regulation support growth", acknowledging its identification of problem areas within the FOS. Bawa agreed that these concerns are real and urgent, but warned that efforts by the FCA to foster growth in the advice profession will be "thwarted unless there is a corresponding change in culture from the FOS".
He added: "The FCA is trying to promote innovation and trust, but that can't happen if advisers live in fear of inconsistent and overly harsh rulings from the FOS. The disconnect between the two bodies is stark."
The letter was accompanied by an appendix co-authored by complaint-handling staff across multiple advice firms, aiming to present HM Treasury with a clearer picture of the challenges. Bawa highlights how Rosemount worked collaboratively with others in the sector to gather evidence.
"This isn't just Rosemount's view," he said. "We compiled case studies and experiences from firms across the country. The volume of concern and consistency of themes was telling – poor communication, lack of contextual understanding, and lengthy delays are all widespread issues."
Calls for cultural and structural reform
At the heart of the letter is a call for "cultural, structural, and procedural" change within the FOS. Bawa argued that unless reform happens, the FOS will remain the "most significant regulatory barrier" that firms must overcome – more so even than the FCA.
He warned: "If the FOS continues to operate in this quasi-regulatory space without reform, the FCA's attempts to support the advice profession will struggle to take root. It's like trying to grow flowers in a field riddled with stones."
An invitation to dialogue
Bawa invited HM Treasury to meet with him and other industry leaders to discuss proposed changes. "We're not here to complain and walk away. We want to collaborate," he said. "The industry is full of people with deep knowledge of complaint handling and client service. Bring us into the conversation."
Bawa said that despite submitting the letter, he has yet to receive a response from the Treasury. He is calling on other advice firms and networks to speak up and press for reform. "Too many firms are keeping their heads down out of fear. But this problem will only grow if we stay silent."
He urged HM Treasury to engage with the sector, review the FOS's structure and culture, and take action to protect advisers from bad-faith complaints that threaten not just livelihoods, but the sustainability of financial advice in the UK.
PA TV's Advice Lens will continue to follow this story as it develops, including any response from HM Treasury or the FOS. For more expert commentary and adviser insights, stay tuned to our upcoming episodes.
