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Investment and pension FOS complaints on the rise

Investment and pension complaints referred to the Financial Ombudsman Service have risen significantly over the year despite strong stock market performance.

The FOS’ annual review shows in the year to 31 March, complaints about investment-linked products such as investment Isas and bonds rose 42 per cent from 3,308 to 4,697, while complaints about stockbroking and portfolio management increased 32 per cent from 1,842 to 2,428.

Pension complaints rose 27 per cent from 3,454 to 4,401, with income drawdown complaints doubling from 94 to 189.

The FOS says while stock markets have generally performed well, consumers may be reviewing their investment products as a result of wider economic concerns.

It says it continues to see a “significant number” of complaints where an investment was recommended which did not match the customer’s attitude to risk.

The FOS saw a wider range of investments being complained about in 2012/13 including life settlements, film partnership schemes and contracts for difference.

There were an increasing number of pension complaints about advice to remove funds from occupational pension schemes and invest in Sipps.

The FOS says these often involved investing in unregulated collective investment schemes, including investments in European shopping centres and Spanish property developments.

Complaints about mortgages also rose 25 per cent from 9,537 to 11,920. The FOS says many complaints could have been avoided if lenders had handled them better.

Hargreaves Lansdown head of advice Danny Cox says: “I am not surprised at the increase in investment complaints. It is easier than ever before to complain and there are lots of no win, no fee lawyers sticking their noses in.”

Investments and pensions FOS complaints chart
Investments and pensions FOS complaints key
Source: FOS annual review 2012/13

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