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RDR: FSA says consumer complaints will rise

The FSA says it is expecting a rise in complaints about investment advisers following the implementation of the RDR, as consumers become more savvy about professional standards in the industry.

In today’s consultation paper on delivering the RDR the FSA says it is expecting a short to medium term increase in complaints.

It adds that firms will need to direct some consumer complaints to professional bodies or the FSA, following proposals to give the regulator oversight responsibilities for professional standards and a role for professional bodies in ensuring standards are maintained.

The paper says consumers will still complain directly to firms in the first instance  if they feel they have been misadvised and will have ultimate recourse to the Financial Ombudsman Service.

But it adds: “In some cases, it may be appropriate for the firm to direct the complaint to the investment adviser’s professional body or to the FSA.

“We anticipate a short to medium term increase in such complaints as consumers become more aware of the standards that they can expect and the willingness of the professional bodies and the FSA to act.”

The FSA says it may increasingly use its powers to withdraw advisers’ approved persons status for serious infringements of professional standards.


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There are 12 comments at the moment, we would love to hear your opinion too.

  1. But will the FSA take any action against the banks – every week I have clients complaining about the “advice” they get from the banks but nothing ever gets done about it. The FSA doesn’t want to know. Just look at the FOS stats – surely it is the banks that pose the biggest risk rather than hammering IFAs all the time

  2. oh well at least we are getting advanced warning that the amount of money we will have to pay into the compensation scheme will have to go up and our PI insurance, thanks PS Note to FSA, can you use your cystal ball to give me this weeks 6 numbers on the lottery

  3. agree with the above, if the majority of complaints are bank related, why is the FSA not removing the permissions from the banks and insisting that the banks refer to IFA firms. Simple reduction in complaints and less regulation for the FSA while reducing costs as less staff required by the FSA!
    The seem to remove advisers/brokers with no problem but the banks are never touched.

  4. i dont agree, i reckon they are setting the industry up for a levy complaints about ifa’S, historically is significantly lower than the BANKS! .

  5. When of when will we get a regulator promoting the many many cases of GOOD ADVICE that has been given rather than constantly encouraging people to complain?

  6. I totaly agree that the FSA should use the same treatment equally to Banks and IFAs.
    As far as as the Customer case is concerned
    the IFAs have been treating them fairly even in
    Fimbra’s time and before that as well. It is
    Time for FSA to standby IFAs and give a message that Treat The Advisers fairly

  7. I have had three complaints over the last 30 years, so how am I going to cope if they rise over the next 30 years. I will be almost 90 in 30 years time!

  8. when will the FOS only start charging fees when the complaint is upheld? instead of bowing to the whim of every spurious claim

  9. Following a number of previous comments above.

    Every week we hear of another Broker or IFA being banned by the FSA, not very often for delivering bad advice or because a client has lost money, but mostly just because the bureaucrat at the regulator found that the offending person has not ticked all the boxes. In such circumstances the bureaucratic mind therefore believes that there has been a possibility, no more than that, of a client being put at risk or the possibility, no more than that, of an opening for some fraud to take place. In the vast majority of these cases there has been no loss and no attempted fraud. It is therefore only in the mind of these uninformed, inexperienced ‘jobsworths’ that most of these ‘risks’ ever appear.

    When there are real risks and actual realised losses, generally through the larger organisations such as banks, who gets banned? Nobody!

    So I believe this is yet more PR by the FSA to justify it’s own existence. After all it is in it’s own interests to create a culture of blame. Having so far managed to sidestep being held responsible for anything much to do with the debacle of FOUR banks going bust on it’s watch, the regulator seems to believe it is omnipotent so will do whatever it takes to retain it’s position.

    Let us hope that if the Conservatives do win the next election George Osborne delivers on his promise to disband the FSA, but also that NONE of the FSA personnel are allowed to transfer to the BoE and they are banned themselves, not because of possible risk in the future, though this should be enough reason, but because of actual VAST losses incurred by the British taxpayer. For which we shall have to bay for a generation!

  10. I am beginning to realise how the Jews must have felt during the Holocaust.

  11. Well said John Harding.

    I am not worried by the need to reach QCF level 4 by 2012 as I completed AFPC 6 years ago. I’m not gloating by the way, but I’ve always felt that I needed to continue learning to be a better adviser to my clients. I’ve continued my CPD/study and hope to reach Chartered status in the very near future.

    I am not worried about compliance as I do everything I should do (at least according to the FSA regulations at the time I do it).

    I am not worried about the quality of my advice, or how I charge for it as I am always up front and open with clients.

    I’m not worried about TCF as this is something that I have always done and my clients are generally very happy with the service and advice they receive.

    So why the hell do the FSA frighten me so much? Because whilst I am 100% certain that I act in my clients best interests, I can never be 100% sure that I am not breaching some current, or perhaps more accurately, future regulation. Maybe I am being unduly paranoid, but the thought that I could be banned due to a perceived risk, despite no complaints or client losses and having worked hard and diligently over many years…..well, quite frankly, that is a scary thought indeed.

    Meanwhile, the banks just go about their business without a care in the world.

  12. What more than the 100,000 pa following the FSA mailshots encouraging consumers to complaint about the LAUTRO driven endowment shortfalls and false regulatory driven shortfall projections based on surrender values (not fund values). What you are really saying is that RDR will not make a jot of difference! But then we know that don’t we!

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