Two of the industry’s most outspoken campaigners are taking on claims management companies – and the Ministry of Justice (MoJ) that regulates them.
Alan Lakey and Derek Bradley are not easy to please. Between them, the Highclere Financial Services adviser and PanaceaIFA CEO have campaigned on everything from the Retail Distribution Review (RDR) and complaints long-stop to Financial Services Authority (FSA) fees and bonuses.
This time, they are taking on unscrupulous claims management companies (CMCs).
Last week the pair met with senior figures from the Ministry of Justice (MoJ), the organisation that regulates CMCs.
The sit-down with MoJ head of claims management regulation Kevin Rousell and principal compliance officer Antony Bolton, scheduled to run for an hour, went on for two.
Bradley said he was “genuinely surprised” by how open the MoJ was to their concerns, given the usual outcomes of meetings with government representatives.
“There was a real feeling that they honestly didn’t know how these companies impacted so strongly on smaller IFA firms in particular,” he said.
“They didn’t appreciate the hoops we have to jump through to defend our corner when CMCs go to an IFA firm and make a complaint.”
IFA firms are at a serious disadvantage when responding to complaints, Lakey said.
Consumers have the choice of going to the Financial Ombudsman Service (FOS) or to the court system. There is, however, one flaw, as Bradley pointed out.
“If the complainant goes to court and it proves unsuccessful, it means the FOS will not then accept the complaint,” Bradley explained. “Yet if someone goes to the FOS, they can then go to the courts, which seems very unfair.”
In the court system, it is up to the claimant to produce the evidence. With the FOS, if the adviser fails to produce documentation absolving him of any wrongdoing, the result may be very different.
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