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Dispatches: Untrained FOS staff turn to google

http://citywire.co.uk/new-model-adviser/news/untrained-fos-staff-turned-to-google-to-research-products/a1100262?ref=new-model-adviser-todays-news-list#i=1

".... One employee of 18 months said: ‘even now I look at an investment case and I don’t know what to ask for. Sometimes I’ve not even heard of the products. I have to Google what it is first.’......"

I do not think it is unreasonable that they have not come across every product out there personally. If you think how many different products there are... Although you would expect there to be some sort of internal system which gives a breakdown of every product post regulation maybe?

I have not read the article, but I will take a look this afternoon when I get a minute. 

 

It's on channel 4 dispatches tonight, so couldl make for interesting viewing.

I'm guessing, having watched the program last night, that this will open the flood gates for all those that had their claims rejected by FOS. As such, we can expect to see our regulation costs increase due to their ineptitude. Surely, after this the FOS is not fit for purpose!!

My client had a £87,000 mis-sold SIPP claim turned down going direct to FOS but when packaged through a claims company it was accepted but he lost 25% of the £50,000 paid out.

He has no idea why the claim was first rejected by FOS as no new info was given to the claims company. He's lost £12,500 of the max £50,000 he could claim back.

Of the £87,000 first invested he's still lost £49,500 in total rather than just £37,000

BTL - 

 

It all depends what the individual first complained about....and if the Claims Management Firm then complained about something else.

For example - If you complain a plan was transferred to a SIPP....FOS might say nothing wrong with that...

......but if you complain you was sold an Unregulated Investment - that is likely to get a different outcome (purely due to the weak regulations surrounding UCIS has changed).

I have seen clients agree to take out UCIS investments - be told 'these are unregluated and you have no protection if things go wrong' - and FOS gets the adviser to get their cheque book out (or our Cheque Book if it's the FSCS).

The Regulated Plan /Unregulated Investment as been badly handled I believe - but rather than getting consumers to understand a 10%+ return is not risk free, the FSA/FCA just changes the rules and interpretations.

 

 

He was advised by TailorMade in Warrington who have stopped trading and told to invest in Gold, farmland, Property which he said seemed plausible. Guy lives in a small 2 bed house in Bury and has no other savings. Not your normal risk taking investor but it takes all types.

I know someone who I would class as a friend who told me he has put £9,000 on his credit card to 'invest' in bitcoin 6 months ago. Not sure what its worth now but seeing him in the pub on Friday. Don't know if to mention it as I'm sure he's had his fingers burnt.

BTL and reply 6 - looks like combined greed/poor advice by the client and adviser.

On your friend - I would ask him - as if some of his other friends copied him it will provide good evidence about why good quality adviser stay well clear of those asset classes.

Of course, he might have doubled his money and sold out..... or lost half his money and owes £9K...

 

 

On the original topic - looks like the TSC wants FOS to look into how many cases were incorrectly investigated whih raises some good questions :-

 

1) When FOS messes up - who pays?

The regulated industry has no input on fees - yet is required to pay what is asked for - so will our fees go up due to mistakes in effect at the regulatory level (seems very unfair)

2) What happens if  case should have been rejected and not upheld?

Will the firm which has paid out compensation be allowed to re-claim that money?

I am sure there are cases incorrectly upheld, just as there are cases incorrectly rejected!

3) Why has no one challenged FOS at a higher level  - i.e. why I have them employed individuals which are not fit and proper for the role they are employed for - or why insufficient management of cases been done to ensure cases go to case handlers who are aware of the products (noting there will always be some products which WOULD need to be investigated to understand what they, due to them being not used for 20 years + - anyone remember BESSA's, TESSA's and Gold Chip Plans for example :) )

Net effect of everything is consumer confidence drops and or costs go up.

 

Perhaps the TCA needs to kick some bottoms and heads need to roll... but I can write the headline now - " We have taken into account the feedback and will do a better job next time...and ohh here is another levy for the industry to pay - we need to double staff numbers and wages again"

 

 

 

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