Tuesday, 06 January 2015 09:28
Ombudsman to add 200 staff but cuts budget and freezes levy
The Financial Ombudsman Service will cut its budget by £31m and freeze its levy at £23.3m in 2015/2016.
Officials this morning outlined the budget for next year, including plans to recruit an additional 200 adjudicators and ombudsmen.
The new budget of £220.7m represents a 13% reduction in cost to the financial services sector, the FOS reported.
The report stated: "We intend to ask the FCA to raise an overall levy for the compulsory jurisdiction of £23.3m in 2015/2016. This is the same as the amount of levy the FCA collected this year – so the overall amount of the levy would be frozen.
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"The levy payable by FCA-authorised businesses is set and collected by the FCA. "The FCA will consult on the total amount of the levy – and on how it should be allocated among industry blocks – as part of its wider consultation on the Financial Services Compensation Scheme, Money Advice Service and FCA levies, which is expected to be published in March 2015."
The case fee paid by businesses will be frozen at £550 – payable only after the 25th case. Officials said this meant 99% of businesses will continue to pay no case fee at all.
Based on current trends, the FOS said it expects to receive around 16,000 new cases about investments and pensions this year – in line with assumptions in
the 2014/2015 budget.
The report said: "In many investment cases, consumers complain that what they bought did not match the description they were given. These cases may be complex – so they can take more time to assess and resolve than other cases.
"We have seen an increase in complaints about unregulated collective investment schemes. Last year the FCA banned the promotion of these investments to the vast majority of retail investors in the UK. These complaints are particularly challenging – often involving numerous parties and overseas investments."
Caroline Wayman, chief ombudsman, said: "Over the last few years the ombudsman's workload has increased substantially – and the volatility of complaint levels remains a significant challenge when planning for the future. "But we're finally seeing evidence that the number of complaints referred to us by consumers is starting to stabilise.
"On the other hand, complaints about PPI are still the main driver of financial disputes. And although numbers are slowly declining, it will be years before we can truly say this mis-selling scandal is over.
"Our plans take into account the increasingly hard-fought and complex nature of the cases we are seeing – not only in PPI but also in areas like mortgages and pensions. No two financial complaints are alike."
She said: "So from payday loans to pension drawdowns, our principal focus this year continues to be on placing fairness at the heart of what we do. Giving people honest, thoughtful answers that help them better understand and make sense of things that have gone wrong."
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Officials this morning outlined the budget for next year, including plans to recruit an additional 200 adjudicators and ombudsmen.
The new budget of £220.7m represents a 13% reduction in cost to the financial services sector, the FOS reported.
The report stated: "We intend to ask the FCA to raise an overall levy for the compulsory jurisdiction of £23.3m in 2015/2016. This is the same as the amount of levy the FCA collected this year – so the overall amount of the levy would be frozen.
{desktop}{/desktop}{mobile}{/mobile}
"The levy payable by FCA-authorised businesses is set and collected by the FCA. "The FCA will consult on the total amount of the levy – and on how it should be allocated among industry blocks – as part of its wider consultation on the Financial Services Compensation Scheme, Money Advice Service and FCA levies, which is expected to be published in March 2015."
The case fee paid by businesses will be frozen at £550 – payable only after the 25th case. Officials said this meant 99% of businesses will continue to pay no case fee at all.
Based on current trends, the FOS said it expects to receive around 16,000 new cases about investments and pensions this year – in line with assumptions in
the 2014/2015 budget.
The report said: "In many investment cases, consumers complain that what they bought did not match the description they were given. These cases may be complex – so they can take more time to assess and resolve than other cases.
"We have seen an increase in complaints about unregulated collective investment schemes. Last year the FCA banned the promotion of these investments to the vast majority of retail investors in the UK. These complaints are particularly challenging – often involving numerous parties and overseas investments."
Caroline Wayman, chief ombudsman, said: "Over the last few years the ombudsman's workload has increased substantially – and the volatility of complaint levels remains a significant challenge when planning for the future. "But we're finally seeing evidence that the number of complaints referred to us by consumers is starting to stabilise.
"On the other hand, complaints about PPI are still the main driver of financial disputes. And although numbers are slowly declining, it will be years before we can truly say this mis-selling scandal is over.
"Our plans take into account the increasingly hard-fought and complex nature of the cases we are seeing – not only in PPI but also in areas like mortgages and pensions. No two financial complaints are alike."
She said: "So from payday loans to pension drawdowns, our principal focus this year continues to be on placing fairness at the heart of what we do. Giving people honest, thoughtful answers that help them better understand and make sense of things that have gone wrong."
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Follow us on Twitter and get frequent news alerts @FPM_online.
Or follow Editor Kevin O'Donnell - @FPM_Kevin or staff writer James Nadal - @FPM_James.
For the latest Sipp, SSAS and retirement news visit our sister news site www.sippsprofessional.co.uk and on Twitter @SippsPro.
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