The Association of Independently Owned Financial Planners (AIOFP) has accused the Financial Ombudsman Service of pushing up the cost of professional indemnity insurance for financial advisers.
“FOS has been going to trade shows and coaching the public to make complaints,” said AIOFP chief, Peter Johnston. “It’s a kangaroo court … There’s no procedural fairness, no natural justice and no cross-examination of the complainant,” he said.
Johnston said he would be writing to FOS ombudsman Alison Maynard to outline his concerns. “Underwriters are leaving the market and we only have three or four left, because they have been badly burned with claims. Premiums are already 2% of gross turnover so the only thing we can do is get a new underwriter, find someone from overseas to come in and offer group insurance.”
Johnston is encouraging members to consider joining an alternative dispute resolution regime such as the Credit Ombudsman Service Limited in NSW.