The FSA's latest consultation paper on the extension of the Financial Ombudsman Service (FOS) to brokers has generally been well received.

The fact that brokers will not be charged for the first two complaints is a positive step, as is the ability to present, for the purposes of the tariff base, a tailored income figure to reflect the proportion of the business that could give rise to eligible complaints.

But concern has been expressed over the lack of an appeals process. There are worries over the unpredictable nature of the ombudsman's decisions and the lack of recourse to a higher tribunal if a 'quirky' decision is made.

There is also frustration over the fact that consumers will be able to bring complaints without incurring any charge. Brokers fear that this will only serve to encourage complaints, leaving them saddled with the administrative and cost burden of defending claims. Unlike insurers, brokers cannot pass these costs on to the consumer.

The consultation period ends on 2 July. Brokers should use this opportunity to make their voice heard.

Michael Faulkner