PIMFA urges Financial Ombudsman Service to address ‘economic imbalance’

The Personal Investment Management & Financial Advice Association (PIMFA) has called on the Financial Ombudsman Service (FOS) to address the “economic imbalance” between claims management companies and the financial services sector.

In its response to the FOS consultation, Charging Claims Management Companies and other Professional Representatives, PIMFA suggested that while the decision to levy a fee to CMCs is welcome, it will not achieve the policy objectives set out by the Government when this power was given to the FOS.

PIMFA, the trade association for wealth management, investment services and the financial advice and planning industry, argued that a case fee of £250 for CMCs and professional representatives “does not act as a disincentive” to bring forward targeted block cases against firms that have little chance of success.

The trade body has called on the FOS to review its approach and seek to levy a higher charge, which would result in firms and CMCs sharing the burden of case fees.

Head of public Affairs at PIMFA, Simon Harrington, said: “Whilst we are pleased to see that the FOS has accepted the principle that CMCs and professional representatives should be required to contribute towards case fees which they bring forward, we strongly believe that the FOS should review its proposals in order to set out a more equitable settlement between CMCs and respondent firms.

“The FOS has a unique opportunity here to be bold and address the economic imbalance which currently exists between CMCs and the financial services sector.

“In doing so, the FOS can set out a framework which is equitable for firms and recognises the roles of both parties as ‘customers’ of the FOS.”

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