Financial Conduct Authority (FCA) UK Regulation Sample Exam

What is the role of the Financial Ombudsman Service?

1. Provide financial advice to consumers

2. Administer and operate a dispute resolution service for clients of FCA-authorised firms

3. Regulate financial products

4. Conduct audits of financial firms

The correct answer is: Administer and operate a dispute resolution service for clients of FCA-authorised firms

The Financial Ombudsman Service plays a critical role in the financial landscape by administering a dispute resolution service specifically for clients of FCA-authorised firms. It acts as an independent mediator between consumers and financial service providers, helping to resolve complaints that consumers have about their dealings with these firms. This service is vital for maintaining consumer trust in the financial system, as it provides a straightforward and accessible means for individuals to seek redress without the need for lengthy legal proceedings. The other options highlight important functions within the financial sector but do not align with the specific role of the Financial Ombudsman Service. For instance, providing financial advice is not part of the Ombudsman's mandate; instead, their focus is on resolving disputes rather than advising consumers on financial matters. Similarly, while regulation of financial products is a crucial function, it falls under the purview of the FCA, not the Ombudsman. Conducting audits of financial firms is also a distinct regulatory function associated with verifying compliance and financial robustness, rather than resolving disputes between consumers and firms. The primary mission of the Financial Ombudsman Service is to facilitate fair resolutions of complaints, making it essential for consumer protection in the financial sector.