I have long campaigned for the customer to be put in the picture when it comes to compliance matters, so when I read in the Ombudsman’s latest newsletter that “The Financial Ombudsman Service is seeing a growing number of cases where customers who have complained to a financial business appear to have experienced treatment that is nothing short of dismal,” I get very annoyed.
The way we treat customers when complaining is deterring almost half from taking their complaints further. While 55 per cent of consumers who made a complaint to their provider felt it had been handled “poorly” while only 4 per cent said it had been handled excellently.
Although high standards of customer service may not seem a number one priority in the current economic climate, complaint handling is an intrinsic part of TCF.
How can we treat customers fairly when we greet them with such low respect and with what the ombudsman terms “weary cynicism”?
I was recently quoted as saying that, from the ongoing FSA reshuffle and the formation of the regulators retail risk department, it would be wonderful if senior regulators had the benefit of face-to-face contact with customers in order to grasp what they understand as “risk” and what they expect from a financial services product.
I also believe employees of the financial services companies that deal with complaints should have the experience of sitting with customers to listen to their grievances directly. Financial advisers do this, and I believe it would completely remove such weary cynicism.
Why do customers complain so much about financial services products? In my opinion, it is because they do not fully understand what it is they are buying. The literature provided needs to clearly show inherent risk and expectation for all financial services products. But does it do this?
In 2007, an FSA review of a sample of 200 key features documents and simplified prospectuses found that just 15 per cent were likely to be effective due to a mix of poor design, structure and content.
In January and February of this year, the FSA reassessed all the documents in the worst part of the original sample and a selection of others.
The FSA says that more than two thirds of the product disclosure documents have shown some “significant improvements”, with the majority of the sample that did not make sufficient improvements produced by, you’ll never guess, asset managers.
Goodness me, I know money is tight but if the asset managers cannot get disclosing the details of their products right, what chance have other organisations got? Particularly as asset management underpins the performance of the majority of financial products.
The FSA expects to have “tough conversations with some asset managers”.
I hope they are tough conversations, as, having written many dozens of disclosure documents on behalf of asset managers myself, it is not a difficult task if, for years, you have sat face to face with customers.