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Complaints to advisers fall 63% – bank complaints rise

Overall complaints to IFAs, financial advisers and non-advised arrangers plummeted from 46,529 in the first half of 2006 to just 17,173 in the second half of 2008.

New aggregate data from the FSA shows a huge level of complaints received by banks in contrast to the falling number of complaints against IFAs.

The data shows that while overall complaints to regulated firms have risen 5.7 per cent, complaints to advice firms have fallen 63 per cent.

Complaints made to all firms over misleading advice have dropped from 423,549 in the first half of 2006 to 174,916 in the second half of 2008.

On average between 2006 and 2008 advisers took longer than eight weeks to resolve 26 per cent of complaints received, while for banks it was just 12 per cent.

Overall 10 per cent of complaints took longer than eight weeks to resolve, with 40 per cent of all complaints decided in favour of the customer.

The data covers the volume of complaints firms have received, by product type and cause of the complaint and how firms have handled them.

The FSA will publish aggregate data covering the first half of 2009 in October, with updates published every six months.

FSA director of retail policy and conduct risk Dan Waters says: “Transparency is an important regulatory tool. Publishing this information will mean that consumers and firms can now see how many complaints the industry receives and how it deals with them. This is stage one of our drive to say more about how the industry handles complaints and builds on our recent proposals, currently out for consultation, about the publication of firm-specific data.

“We expect firms to treat customers fairly by dealing with complaints promptly and efficiently. We are focusing even more attention, particularly through intensive supervision, on ensuring that firms are dealing with complaints properly.”

Which? personal finance campaigner Phil Jones says the increasing number of complaints to banks is a “poor reflection on the industry”.

He says: “Financial firms simply aren’t treating consumers well enough and things must change if the industry is to rebuild its reputation.

“Consumers need more information about which firms are being complained about and why, so they can make more informed choices when shopping around for financial products.”

City law firm CMS Cameron McKenna partner Simon Morris has labelled the data “alarming regulatory disinformation”.

He says: “Presenting crude statistics about complaints that firms receive, let alone uphold, provides no useful information to help investors make important decisions. Instead, it creates an alarming and inaccurate impression that firms are not to be trusted.

“This is the last message to convey at a time of general ecomonic distress when customers need savings and insurance cover more than ever. It is irresponsible for the FSA to be undermining consumer confidence in such an insidious manner.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Complaints to advisers fall 63% – bank complaints rise
    So when is the FSA going to start getting tough on the Banks, i.e. actually start regulating their activities, and stop kicking the brown stuff out of the IFA sector? When hell freezes over if it can get away with it.

  2. Perverse isn’t it?
    While we listen to the ramblings of the examination drum beaters the FSA is destined to decimate the number of IFAs using a blunt instrument it calls the RDR while at the same time it appears to be handing over the vast majority of the great unwashed to the banks. Bonkers or what?

  3. Bankers.
    This should make (but it won’t) for uncomfortable reading at the FSA, to learn what we know about already, i.e their chums at the banks and the ‘quality’ so called ‘advice’. No doubt it will result in a thematic review of hard working brokers to ascertain the amount of paperclips they use or some other such heinous activity.

  4. Alan Lakey - IFADU 3rd September 2009 at 2:39 pm

    Effective Regulation
    Effective regulation must surely reflect the risk to consumers – both real and perceived – that emanate from the actions of product distributors and advisers. Not only do the industry surveys highlight this differential but the FSAs own statistics confirm that advice from whole of market firms is better received than that of the bank brigade. It is not too late to rewrite the RDR into a cohesive document that reflects these risks and seeks to underpin the IFA process, whether fee or commission-based.

  5. The MSyrety Shopepr for IFAs 8th September 2009 at 10:18 am

    Myth
    FSA is full of bankers. Bank speling reads FSA. FSA-BANKS-FSA-BANKS-FSA-BANKS-FSA-BANKS…………………. doesn’t matter how you read it FSA=BANKS

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