AIFA says new FOS funding model a ‘better deal’ for advisers

The Association of Independent Financial Advisers (AIFA) has hailed the increase in the ombudsman’s free case fee threshold as a positive move for IFA firms.

In a consultation paper published today, the Financial Ombudsman Service (FOS) proposed a modernisation of its funding model which could increase the number of free cases for small businesses from three annually to as many as 25.

"We have persistently pressed for a better deal for advisers, who represent a very small percentage of the FOS caseload," said AIFA director general Stephen Gay (pictured). "We are therefore pleased the Ombudsman has recognised this and delivered a material benefit for IFA firms."

He added the industry body has held discussions with the FOS about increasing the free case limit - a move which effectively exempts all but the largest firms from paying for cases referred to the ombudsman.

"We need a fair and balanced dispute resolution service that works for both consumers and the financial services industry," added Gay. "At present the costs are not distributed proportionately across the industry. This is an important move to redress the balance."