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PIS takes aim at FOS policies

Professional Investment Services (PIS) has hit out at the Financial Ombudsman Service (FOS), questioning the dispute resolution body’s legal analysis, risk profiling and claims policies.

In a submission to Cameronralph Navigator’s independent review of FOS, the dealer group – which recently announced it was setting aside $10 million to handle FOS claims made against its advisers – voiced its displeasure with a range of FOS policies and procedures.

While claiming PIS has “an overall positive working relationship with FOS” , John De Zwart, managing director of PIS parent company Centrepoint Alliance, also laid out a number of areas in which the non-aligned financial planning group believes the dispute resolution body of which it is a member could improve.

Among a number of gripes, Mr De Zwart listed FOS’ claim management process – including the scheme’s acceptance of “vexatious claims” – penalty interest procedure and its policies on adviser licensee transfers and risk profiling practices.

In relation to risk profiling, the submission explains that PIS has “on several occasions encountered situations where FOS takes an arbitrary view on how a client’s risk profile should be assessed based on their age … despite support indicating that a client has agreed to a risk profile not in line with the view of FOS at the time the advice was provided”.

While the submission acknowledged the validity of risk profiling guidelines, Mr De Zwart argued they “should not be applied as rigidly as they appear to be by FOS”.

In addition, the submission states that while the “fundamental legal reasoning of FOS in relation to issues around financial advice is sound”, sometimes the body’s legal analysis is lacking.


Specifically, the submission questions FOS’ application of legal reasoning without “consideration of other factors which may be relevant to the dispute”, such as contracts and contemporaneous written evidence.