So someone remind me why it’s the IFA sector that lacks consumer confidence?
After a lot of digging by Money Marketing the FOS gave us uphold rates for 2008/09. It upheld 69 per cent of bank complaints in the last year, more than double the 33 per cent upheld against advisers.
The uphold rate for life insurance/investment product providers was 36 per cent and 45 per cent for both fund managers and stockbrokers respectively.
Yes, you could say that the banks had a higher number of cases upheld because of PPI complaints, which skyrocketed in the last year. But there are also large numbers of banking complaints, such as the recent misselling of the Aviva global balanced income fund by Barclays, that are yet to reach their peak at the ombudsman.
In his chief ombudsman’s report, Walter Merricks says uphold rates over the past eight years have averaged 30-40 per cent.
He says: “We would normally expect only a minority of the complaints referred to us to turn out to have been justified, as is the case with independent financial advisers.”
The House of Lords Economic Affairs Committee this week labeled Financial Services Compensation Scheme levies “unfair” and called for calculations to be based on firms’ levels of risk, rather than their size.
It wants banks to pay a greater proportion of the cost of the FSCS because they take greater risks. Evidently they have pretty ordinary complaints handling practices too.
How do you think the costs to the industry should be calculated so it’s fairly split between sectors? Should advisers be rewarded when complaints and uphold rates are low? If so, how?
Post your comments below.