IFAs mount stat attack on FSA

The FSA has been called on to apologise by advisors for its alleged manipulation of Financial Ombudsman Service complaint statistics to try to dismiss IFAs’ claims that they provide a superior service to banks.

the FSA and UCISThe FSA has been called on to apologise by advisors for its alleged manipulation of Financial Ombudsman Service complaint statistics to try to dismiss IFAs’ claims that they provide a superior service to banks.

The FSA’s first RDR newsletter published last week says advisers should not use the fact they are only responsible for 2 per cent of all FOS claims as evidence for why the RDR must be focused on banks and not IFAs.

The FSA says instead of looking at all FOS complaints, advisers should focus on data generated from products and services provided both by banks and IFAs, such as investments and pensions.

The FSA says 14 per cent of new cases, or 22,278 out of 163,012 referred to the FOS in 2009/10 relate to products provided by both banks and IFAs. Of this number, 50 per cent were upheld. 52 per cent of bank claims were upheld compared with 39 per cent of complaints about IFAs. The regulator says IFAs accounted for 12 per cent of investment-related complaints compared with 29 per cent for banks.

Ashley Law director Jock Cassidy says not including the volume of business undermines the credibility of the statistics, commenting “The volume of business should be taken into consideration if you are trying to get meaningful statistics. Anyone can make whatever sort of ammunition they want from statistics.”

Facts and Figures managing director Simon Webster says: “The use of selective statistics to defend the indefensible is evidence of the FSA’s desperation to prop up the rationale for the RDR.”

An FSA spokeswoman says the figures were supplied for “context”. She says: “The article points out that its main focus is to debunk the myth that because only 2 per cent of FOS complaints are attributed to IFAs, the RDR should be focused solely on improving the standards in banks.

“The other figures were supplied for context, and as we all know, complaints figures are merely one indicator of the quality of advice or service, not an absolute marker.”

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