Financial Ombudsman Service chair Baroness Manzoor today announced she would be stepping down in August - just days after FOS CEO Abby Thomas quit the organisation.

Baroness Mansoor will have completed two terms by the time she leaves on 1 August, the FOS said.

The FOS will shortly begin the search for a replacement for Baroness Manzoor.

FOS CEO Abby Thomas quit the organisation last week after two years in the role following reports of disagreements with the FOS board over new fees for CMCs and professional representatives. She has not commented on these.

The FOS has already confirmed that interim arrangements will apply to cover Ms Thomas’s position, with Deputy Chief Ombudsman James Dipple-Johnstone covering the Chief Ombudsman role and chief finance and risk officer, Jenny Simmonds, covering the chief executive role. A search for a permanent replacement for Ms Thomas is expected but has not been confirmed by the FOS. The FOS says it will be announcing next steps in due course.

The decision by Baroness Manzoor to stand down comes as speculation has increased that an overhaul of the regulatory and redress systems is being considered by the government which wants to cut financial services red tape to encourage growth.

Baroness Manzoor said in a statement: “It has been an honour and privilege to have served as the chairman of the Financial Ombudsman Service over the last six years. In that time, much has been achieved.

“We have streamlined the Financial Ombudsman Service, introducing new service standards with a focus on timeliness, tackling older cases, improving quality, and better customer service. Key priorities have included driving forward the implementation of rule changes to permit the charging of case fees to Claims Management Companies and other professional representatives whilst ensuring significant consumer safeguards. This is an important and very significant milestone in financial services. 

“But there is still more to do. There must be greater use of technology to implement new ways of working and a greater emphasis on ensuring both the Financial Ombudsman Service and the Financial Conduct Authority continue to act effectively. The joint Call for Input is an exciting opportunity to refresh the Dispute Resolution Rules and modernise the redress system, enabling a focus on the ombudsman service’s core statutory mission of resolving consumer-type disputes impartially, quickly and with minimum formality.

“As the Chancellor has acknowledged, the Financial Ombudsman Service plays a vital and independent role in the financial redress system. I will continue to work with all our stakeholders to deliver the best possible service for all our customers as we move forward."

Ashley Alder, chair of the Financial Conduct Authority, said: “The Financial Ombudsman Service has pursued an ambitious programme of improvement over Baroness Manzoor’s time as Chair.

“A commitment to positive change — together with her determination and boundless energy — has been instrumental in driving a series of ambitious initiatives directed at benefiting the thousands of consumers who rely on the service every year."