20th July 2012

Badges? We don't need no stinking badges

Panacea have teamed up with ThoughtLeadership Live to produce a FREE ‘Bento for One’webcast to support and educate IFA's. 

The financial services industry is going through one of the most radical overhauls in recent history. However, as this happens the legal foundations of the industry are becoming more and more shaky. It was for this reason that on 20th June 2012, Derek Bradley, CEO of Panacea and Alan Lakey, Partner of Highclere Financial Services, met with senior officials from the Ministry of Justice’s claims management regulation unit to discuss the problem of CMCs issuing spurious complaints, which have become more prevalent in the wake of the payment protection insurance mis-selling scandal. Their findings: 

  • The MoJ has shut down 734 CMCs (in the year to the end of March)
  • The MoJ has doubled the amount of staff to deal with this issue
  • An estimated 75% of complaints to the Financial Services Compensation Scheme come from CMCs and 50 per cent of claims to the Financial Ombudsman Service are from CMCs.

Bradley and Lakey have therefore proposed a solution to the MoJ: remove CMC-managed claims from FOS jurisdiction and place them firmly within the court system. This will treat CMC complaints in the same way as a case that has gone to litigation – outside of FOS jurisdiction.

View the webcast below

Panacea Comment, Panacea Webcasts

Registration

Free Registration and CPD

Read More

Related Articles_

The Golden Rule of AI for Financial Advisers: Protect Your Client Data

Artificial intelligence has the potential to transform the way advice firms work, helping to reduce administration, improve efficiency and free up more time for clients. But before embracing AI, there is one principle that should never be overlooked

Read More

Getting Better Results from AI: The RTCC Framework

Artificial intelligence is only as good as the instructions you give it. If you’ve ever asked AI a question and received an answer that felt generic, vague or simply not quite right, don’t be too quick to blame the technology.

Read More

Beyond the Hype: The Four Pillars of AI Assistance for Financial Advisers

Artificial intelligence has quickly become one of the biggest talking points in financial services. But once you look beyond the headlines, many advisers are left asking the same question: “What would I actually use it for?” If your only experience of AI has been asking it to write the occasional email, you’re only scratching the surface.

Read More

Comments (3)

.



Edited 1 time(s). Last edit at 23/07/2012 03:58PM by Stephen Hoult.

Admin   23/07/2012   15:57
I have just read your interesting article on CMCs.
I confess to not having much experience with these (Thank goodness or luck!).
However I would be grateful for some clarification on points which have niggled at me for some time.

What is to prevent an adviser from:

a) Ignoring a CMC completely?
b) While at the same time writing a letter directly to the client (or ex-client) politely pointing out that:
i) If they have a genuine claim you are more than happy to consider it and deal with them directly in a courteous and prompt manner.
ii) While pointing out that dealing with a CMC will invariably reduce the value of any successful claim, while on the other hand may raise unfounded expectations which may ultimately lead to disappointment.
iii) If the claim is fraudulent this may possibly lead to further consequences. (Indeed what is to stop a firm bringing proceedings in such an event? If an example is made with sufficient publicity it may well act as a deterrent).

Your comments and observations would be most welcome.

Harry Katz   23/07/2012   09:35
In short, Harry, the FSA expect us to treat third-party complaints as if stemming from the insured. Additionally, the PI insurers have a strict process which must be followed in order that the terms of the PI cover are not breached.

Those advisers that do not have PI cover for the matter being complained about can deal directly with the client to establish the basis of the complaint.

I always contact my clients direct to ensure that it is a complaint and not a third-party parasite trying it on.

Thus far I have always found that it is a parasite which has convinced the client that an industry-wide compensation fund is just waiting for them to collect.

Alan Lakey   23/07/2012   16:13

You need to be logged in to comment on this article