Complaints about IFAs fall to just 3 per cent

Complaints to the Financial Ombudsman Service against IFAs have fallen in the past year to only 3 per cent of new cases.

The FOS received a high of 127,471 new complaints last year, with only 5,100 complaints against advisers, down from 4 per cent in 2007/08.

A FOS spokeswoman says only 30 per cent of complaints against IFAs were upheld.

She says: “The uphold rates for IFAs are much lower than for other areas.”

Banks were the cause of 59 per cent of complaints, life insurance and investment providers 11 per cent, general insurers 13 per cent, general insurance intermediaries 5 per cent and mortgage intermediaries 4 per cent.

Complaints about investment-linked products more than doubled this year to 5,798 from 2,750 in 2007/08 while pensions-related complaints decreased 9 per cent in the past 12 months to 4,825 from 5,297.

FOS chairman Sir Christopher Kelly says: “As businesses tighten their belts, and the credit crunch leads to increased financial difficulty for many consumers, we are gearing up to deal with further volatility in complaint volumes.”

Yellowtail Financial Planning managing director Dennis Hall says IFA complaint numbers are so low because they focus on building long term relationships with clients.

He says: “Advisers have been much quicker to embrace fees and customer agreed remuneration structures where they generate recurring income on the services they deliver and the long-term relationships they develop with clients.

“Banks have a high turnover of staff, they are unlikely to try to form long-term relationships with clients and their focus is on sales volumes and turnover.”

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. THE RDR MYTH IS EXPOSED FOR ALL TO SEE
    IFA’s have 3% of complaints of which 2.1% were dismissed. So the IFA is responsible for 0.9% of complaints upheld. In 2005 the FSA representation to the Treasury Select Committee said the iFA had 70% of market distribution. 70% of the market and only 0.9% of the complaints! So why does the IFA have 100% of the regulation? This is especially poignant at a time when, at the hands of the FSA (RDR) the IFA is heading for Decimation – to the benefit of the unregulated banks. This cannot escape the conspiracy theorists amongst us, as a bank orchestrated handover of IFA distribution. Will then the consumerists be better served by the 59% of complaints the banks are shown to have?

    SIMON MANSELL TEMPLE BAR IFA

  2. Julian Stevens 27th May 2009 at 10:32 am

    Complaints about IFAs fall to just 3 per cent
    But how can this be? Everyone knows (well, ther FSA seems convinced anyway) that we’re all just a bunch of commission-hungry, semi-competent and underqualified cowboys merely masquerading as professionals. I know what it is ~ we must be better at fobbing off complaints than the Banks. Yes, that’s it. We’re just craftier and sneakier, which is why we need so much attention from the regulator.

  3. How Do They Do That?
    Kept people out of MPPI, Kept people away from Icelandic Banks- just phew!, Put them off “easy” to good to be true money for nothing structured products , kept them out of stagnant insurance “low risk” funds and talked them through the reasons why. Did not set sales tagets of the “product” of the month regardless of best advise, need or suitability or whatever. Easy isn’t it

  4. 3% of all complaints
    3% of total complaints. IFAs are responsible for 13% of investment product complaints and 18% for pension complaints. Statistics are misleading. Hardly room for complacency amongst IFAs.

  5. Complaints about IFAs fall to just 3 per cent
    This article just goes to prove that the CML couldn’t have got it any more wrong if they tried! Further proof that they and the FSA should be looking at the ‘big boys’ rather than the hard working, customer focused, small brokers who are being forced out of business.

  6. Torild Bastien, Iver Mortgage Company 27th May 2009 at 8:44 pm

    CML comment
    How do this info sit with the news last week that CML blamed mortgage brokers for all mishaps and FSA was very happy to go along with it? They want all advisers to disappear as they want to ban commission and for all consumers to deal directly with providers or at least pay fee for the advice service. I feel AMI is not fighting our corners hard enough.

  7. Alistair Cunningham 29th May 2009 at 8:48 am

    To Simon Mansell
    Your maths is flawed. To use an extreme example, if of the 97% non-IFA complaints every one was dismissed then the 30% of 3% would become very significant indeed! You cannot say that because only 30% were upheld that “the IFA is responsible for 0.9% of complaints upheld”, as you do not know what percentage of the other complaints were upheld. You have assumed they all have!

    Furthermore the Treasury Select Committee were looking at long-term savings, where the FSA will be factoring in e.g. PPI, bank fees etc.

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