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Structured rise as investment complaints fall

The number of complaints about structured products leapt by 40 per cent between June and December last year.

FSA complaint data, which was published last week, shows there were 1,692 complaints about structured products over the second half of last year compared with 1,219 in the previous six months.

Overall, complaints about investments fell by 6 per cent from 43,605 in the first half of 2011 to 40,972 in the second half.

Complaints about decumulation, life and pensions dropped by 4 per cent from 81,563 to 78,076.

Complaints related to investment management and investment services, including platforms, increased by 8 per cent from 4,787 to 5,151.

Personal pension complaints were relatively flat at 23,098 while income drawdown complaints dropped by 5 per cent from 1,042 to 989.

Equity-release complaints rose by 20 per cent from 439 to 530.

Barclays Bank had the most investment complaints, with a total of 3,284. It upheld 37 per cent of investment complaints it closed in the second half of 2011.

Aviva received the most decumulation, life and pensions complaints with 8,807, and upheld 54 per cent.

Across all the financial services firms included in the data, 44 per cent of both investment and decumulation, life and pension complaints were upheld.

Clearwater Financial Planning managing director Duncan Carter says: “With interest rates being as low as they are, people are seeing the headline income rate of structured products and buying into them without realising what they have bought.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Missold Investments 6th April 2012 at 11:42 am

    Building on the quote from Duncan Carter: and they don’t realise what they have bought until something goes wrong, like when the counterparty fails and they learn that ‘capital protected’ does not always mean ‘capital protected’.

  2. Lindsay Bateman 11th April 2012 at 5:28 pm

    Let’s not overlook the fact that many investors were sold structured products with the headline offer of “100% principal protection on maturity” by the banks they trusted – only to find after the demise of Lehman’s that this headline offer was suddenly deemed irrelevant. Fortunately many banks have taken upon themselves to do the right thing and honour their original commitment. Others have been forced to do similar by the local regulator or via the courts – but a great many investors continue to struggle for capital repayment….Many original complaints remain unresolved. Strong and consistent action by global regulators in this regard would help rebuild trust in the banking system…

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