A campaign to introduce a long-stop for advisers is gaining momentum. Fiona Murphy looks at the issues driving this
Advisers are once more fighting for the re-introduction of a long-stop on consumer complaints.
This basically means there will be a cut-off point so advisers will not be liable for complaints fifteen or twenty years after the advice was given.
This is a significant issue as many retired advisers could still find
themselves feeling the brunt of such a complaint.
The introduction of a long-stop has been an ongoing debate for several
years. One case in particular has highlighted why many advisers would like
to see it introduced.
Last year, a recently retired adviser, Phillip Griffin, a partner of the now shut IFA Philip Griffin & Associates, alleged he was being chased by a claims management company over pension transfers requested by two clients in 1989.
Griffin, aged 75, said the claim left his firm, which he had decided to close
in anticipation of RDR, "unsaleable" and that such claims management firms were "running amok" with no regulation. Griffin has been in on-going discussions with the Financial Ombudsman Service.
This is a timely reminder of the issue, but why haven't regulators acted on the long-stop in the past to prevent long-buried cases rearing their heads for retired advisers?
Back in 2008, the Financial Services Authority rejected calls for a 15-year long stop on financial advice in policy paper CP158. The paper had concluded it should not consult on this as it had been unable to
demonstrate where it would bring additional benefits to consumers and firms.
Also that year, Lord Hunt carried out his review into FOS, and identified the long-stop as a particular area of tension among respondents.
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