Connaught Income Fund

Peter Aldous Excerpts

Tuesday 12th January 2016 Commons Chamber

[Guto Bebb]

The hon. Lady has asked my fourth and fifth questions.

My fourth question is this: 10 months after the mediation was cancelled, are we in a position to get an update from the FCA, and, if we are, how soon can that update be offered?

Finally, we need an end date. We need to know when this investigation will be completed. I ask the Minister to implore the FCA to provide that information.

[Peter Aldous (Waveney) (Con)]

I understand this situation very well. My constituent Charles Rodbourne has lost the bulk of his life savings. This scandal has been going on for seven years now. Will my hon. Friend urge the Minister to do all she can to bring it to a conclusion as swiftly as possible, as so many people across this country are affected?

[Guto Bebb]

I join my hon. Friend in urging the Minister to do just that.

In relation to my five questions, I think that the FCA has hidden behind its claims that, because this is a live investigation, it is not in a position to comment. Will the Minister confirm that there is in fact no statutory reason why the FCA cannot provide a progress report for those who are interested in this issue?

Finally, it is important to address the ongoing concern about the way in which the IFA community is being treated by the regulatory authorities in relation to the Connaught issue. Emails and other information in the public domain imply that the Financial Ombudsman Service, when dealing with complaints about Connaught, is instructing its caseworkers to find against IFAs regardless of the facts of the matter, and indeed regardless of the fact that there is an inquiry and an investigation into possible fraudulent wrongdoing within Connaught in the first instance.

It is entirely appropriate that independent financial advisers should be held to account for any poor advice offered. However, that would demand that each case, or each complaint brought to the FOS, is considered on merit. The instructions to FOS officials to ignore such evidence of wrongdoing and the on-going investigation into what happened in Connaught makes it very difficult for us to have any confidence in the decisions made by FOS in relation to complaints against individual IFAs.

I understand the need to ensure that both the FOS and the FCA operate independently of each other. However, is it too much to ask that they at least consider each other’s actions before making decisions that are clearly based upon only a partial understanding of the facts?