The Financial Services Authority, the UK regulator, has appointed Sir Nicholas Montagu as chairman of the Financial Ombudsman Service.

Sir Nicholas is currently the chairman of the Aviva UK Life with-profits committee and a director of the Pension Corporation. He was also formerly chairman of the Board of Inland Revenue.

He takes the helm at a time when the FSA has been punishing a number of firms – including wealth managers – for various shortcomings. Recent years have also seen complaints about issues such as the sale by banks of payment protection insurance, leading to multi-billion pound compensation claims. The watchdog has also seen some of its bank supervision powers transferred to the Bank of England under reforms enacted by the current Conservative/Liberal Democrat coalition government. The FOS, set up 11 years ago, handles complaints that consumers and financial firms have not been able to resolve themselves.

“His predecessor, Sir Christopher Kelly, steered the FOS through challenging periods, and the next few years will be no easier,” said Lord Turner, FSA chairman.

“This role needs a customer service champion to help shape the FOS’s future role in the new regulatory structure, and that is what we have with Nick,” he said.