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Intermediary complaints up 19%

The number of complaints against IFAs, advisers and execution-only intermediaries have increased 19 per cent from 20,713 in the second half of last year to 24,458 in the first half of this year.

The FSA’s complaints data, published today, shows the number of complaints against banks have remained stable over the same period, increasing by 1 per cent from 1.27 million to 1.28 million.

Complaints about mortgage firms, which includes brokers and mortgage lenders, increased 2.6 per cent from 29,245 to 30,014 over the period.

Life insurer complaints increased by 13.3 per cent from 42,192 in H2, 2010 to 47,853 in the first half of this year.

The total number of complaints about all financial services firms increased by 3 per cent, from 1.8 million to 1.85 million.

General insurance and pure protection product complaints, including PPI, made up 45 per cent of total complaints with 848,357, while the proportion of complaints about banking products, including current accounts, savings products and credit cards, accounted for 43 per cent with 812,197.

Complaints about pension products made up 4.4 per cent of total complaints with 80,879, while complaints about mortgage products made up 3.6 per cent with 67,309.

The total number of complaints closed during the period decreased by 9 per cent, from 1.71 million to 1.56 million. The percentage upheld remained stable, increasing slightly from 49 per cent in H2, 2010 to 50 per cent in H1, 2011.

The total redress paid by financial services firms decreased by 11 per cent from £459m in H2, 2010 to £409m in H1, 2011.

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Comments

There are 18 comments at the moment, we would love to hear your opinion too.

  1. Bob Riach Riach IFA 28th September 2011 at 9:43 am

    The ombudsman will be doing well out of these complaints when the IFA has to pay the ombudsman cost win or lose
    I’ve just had another complaint rejected after over a year, yet I had to pay £500 ombudsman cost.

    At a time when I’m trying to reduce outgoings I could do without these charges, a fairer system needs to be introduced, it’s been talked about but nothing has changed

  2. And how exactly is RDR going to improve these figures ?

  3. Strange?? Reading these columns I was under the impression that IFA’s never had any complaints registered! Perhaps we need a regime that promotes fee based advice and raises the standards of qualifications….oops, that RDR isn’t it!

  4. I have no problem with the public complaining about IFAs or other intermediaries selling unsuitable high risk products to unsuspecting investors who are either ill informed, unwise in these matters, or who have been deliberately targeted by sales persons who have no idea of how to conduct Financial Planning services or advice.

    The problem however is not as a simple as it looks because the whole market of financial products is now the target of those who seek to destroy the financial sector or our country, call me paranoid if you wish, but that doesn’t mean “they” aren’t out to get us!

    The FSA has missed a magnificent opportunity to vet products before they are put to the market, simply because they actually don’t have the necessary expertise to do so and to disseminate the wheat from the chaff and it would mean actually taking responsibility for any cock ups.

    There will always be rogues and crooks in our industry, but as I proceed towards Level 4 (at the age of 62 who really needs it I ask, but get on with it nevertheless) I am impressed at the amount of things the regulator thinks I should know about, that have never been the subject of previous exams, CPD or tests in the past, nor in anywhere other than “exam land” have little relevance to how we conduct business in this industry.

    Let’s look at what we used to do for a moment:-

    Protect families from the effects of premature death and / or Critical Illness to preserve capital.

    Protect individuals and families Income from the effects of Incapacity through illness or accident

    Prepare individuals for a comfortable retirement with effective pension planning

    Invest their money wisely so that it grows and can provide additional income if required

    Assist them to mitigate punitive taxation such as IHT and CGT in order to retain the maximum growth in their assets.

    Assist families to prepare and save for better education for their children and other special projects as they desire.

    Give mortgage advice and guidance.

    So, can anyone tell me what has changed since the authorities in their wisdom closed down Fimbra and substituted it with two totally inadequate regulatory bodies and now a third one is coming into being, which resembles a Morphed version of the FSA, yet none of those who operate this system of regulation do not appear to have even passed FPC!!

    The loonies are really in charge of the asylum now aren’t they?

  5. No surprise whatsoever regarding the large increase of complaints against IFA’s etc. Perhaps their inability to grasp what is going on in the financial world plus a desire for commission plus ongoing trail commission is fuelling the problem. It is always the IFA’s who are the first to criticise the banks selling tactics when they themselves are not exactly wonderful.

  6. Well well well, this brings it all into perspective. Another story on same blog, same time, Barclays on its own accounted for more than 10 times the number of complaints the intermederies. When are the FSA going to wake up to this or are they frightened of rocking the boat with their future employers.

  7. So, IFA’s have 1.32% of all complaints. Hmmm. Seems like we have a serious problem, not.

  8. WOW the number of complaints made about IFA’S totalled 24,500, that is a drop in the Ocean compared to the 1.3 million complaints made against Banks. But what does the FSA concentrate on? Yes you’ve guessed it, the IFA market!!

    Its like spending all your time and energy fixing a washer on a dripping tap while ignoring the water pouring through your living room ceiling from a broken pipe.

  9. @Gaaza & @ Richard Jenkinson both overlook the fact that receipt of a complaint is NOT the same thing as having it upheld.

    I grant that the RDR may reduce the number of complaints against IFAs – but only because consumers unwilling to pay fees will instead be stitched up by the banks.

  10. The RDR will most definitely reduce complaints.

    Because it will most definitely reduce adviser numbers.

  11. @ Richard Jenkinson – Sorry but I don’t see the point you are making. Are you saying that all will be well when fees replace commission and New Model Advisers replac old farts ?

    If so then I have to disagree. Some of the worst offenders currently trading pretend to be fee based when they still have a commission mentality and operate under CAR – which is not real fee charging and to many new model advisers engage in activity for its own sake and think that level 6 makes them somehow Qualified.

    Crooks have always existed and will always exist. The method of payment or level of qualification makes no difference

  12. Richard Jenkinson 28th September 2011 at 2:11 pm

    Peter Turner @ 12:48 says we overlook the fact that receipt of a complaint is NOT the same thing as having it upheld……………..consumers unwilling to pay fees will instead be stitched up by the banks.

    So better to be stiched up by the banks than an IFA then ? No, better not to be stitched up at all but that will never happen in this world. Also IFA’s often offer appalling advice and charge a fee anyway. In terms of the FOS they are about as useless as resolving issues as the FSA so whether or not the FOS uphold a complaint means nothing either.

  13. Richard Jenkinson 28th September 2011 at 2:13 pm

    John Blackmore | 28 Sep 2011 1:47 pm

    Are you saying that all will be well when fees replace commission and New Model Advisers replace old farts ?

    >>> No, IFA’s charging fees or commission will give appalling advice

  14. Errmmm… but Mr Naylor isn’t sorting product wheat from chaff what clients need an IFA for?

  15. Mr Jenkinson, I don’t know why you make such all encompassing assumptions about IFAs, we are the most respected sector of the financial services industry, have the least number of complaints upheld and are more financially aware than any banks whose excessive risk taking pushed us into recession and their continued disregard for the public in paying themselves undeserved rewards, taints the financial system to such an extent that putting money into a bank account is now considered a risky investement due to low interest rates which do not beat inflation.
    We know what ‘s going on in the financial world we just cannot control it and the regulator charged with the task is not fit for purpose.

  16. Personal Investment Firms were responsible for 1.3% of total complaints, and paid out 0.46% of total redress over the period in question, but we did not actually have the lowest number of complaints upheld, nor the lowest percentage of complaints upheld. It’s a good record, but I think we should be a little more careful in our assertions, especially as IFA complaints are expected to increase when investment markets are low and / or volatile and these figures may not look quite so positive for the next few data sets.

  17. Richard Jenkinson 29th September 2011 at 3:52 pm

    Ned Naylor | 29 Sep 2011 10:08 am

    Try reading the comments properly. It does not state ALL IFA’s.
    It must be your own personal biased view that you are the most respected sector of the financial services industry.
    So all those people borrowing more than they could afford had no impact on the current financial situation then ? You also say you are more financially aware than the banks, which is not much of an accolade is it ? . Incidentally why would any one put money into a bank account to earn interest ? Is that the sort of recommendations you make to clients ? Surely there are better options.
    Calm down dear !

  18. It really makes me feel sad that our beloved industry has been segmented and all that happens now is the left side slags the right side and then the right side slags the left side! If you think that the FSA doesn’t debate things thougherly before implementation (and you may be right) just step back and take a look at yourselves. You’re all on the same side but still can’t discuss any issues without slagging each other. You are all acting like a bunch of spoilt school children, I think they would call you ‘muppets’!!!

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