The FSA’s gross manipulation of Financial Ombudsman Service statistics in an attempt to undermine the argument that IFAs offer a better service than banks has quite rightly angered the adviser community.
We doubt that, even in a mischievous moment, the British Bankers’ Association would have attempted to massage FOS stats in the way the FSA presented its argument.
In a section of its RDR newsletter entitled “Myth busting”, the FSA suggests advisers are wrong to use the fact that IFAs are only responsible for 2 per cent of FOS complaints as evidence of their superior service.
It is widely acknowledged that using the 2 per cent figure, on its own, does not offer a complete picture as banking complaints are skewed by the inclusion of very large numbers of PPI and bank charge complaints.
The FSA goes on to point out IFAs were responsible for 28 per cent of all pension complaints in 2009/10, compared with 10 per cent for the banks.
These figures are meaningless without giving them proper context by offering an indication of the business volumes for each distribution route, which the FSA fails to do. As an example, out of the total individual pension premiums paid in 2009, IFAs had a 75 per cent share of the market and banks had a 5 per cent share.
Is it really a shock to see IFAs with a higher level of pension complaints compared with the banks? Rather than “myth-busting”, the fact that banks had so many complaints relative to their market share only adds to IFA arguments. The FSA fails to point out lower levels of upheld complaints for IFAs. Whatever way you look at it, FOS statistics show IFAs have a very good complaint record compared with other distribution channels and for the FSA to suggest otherwise is extremely misleading.
In launching this misguided propaganda attack on IFAs, the FSA has scored a spectacular own goal. It suggests either a worrying lack of basic statistical understanding or an under-handed attempt to manipulate the public policy agenda on the RDR.
Rather than spending so much time composing dodgy dossiers and maliciously spinning, the FSA should be focusing its energy into working closely with the adviser community to ensure the RDR is truly a success in the eyes of consumers.