A small number of IFAs are in danger of making consumers question the professionalism of the entire IFA sector, according to the Financial Ombudsman Service.
Head of communications David Cresswell says the vast majority of IFAs deal well with any consumer complaints they may receive but a small minority are risking bringing the sector's professionalism into disrepute by not dealing properly with customer complaints.
Cresswell sees no evidence of a complaints' culture, citing recent statistics showing that of the 4,000 IFAs covered by the FOS, complaints were brought against 1,000 last year. Eighty per cent of the IFAs with complaints brought against them will not pay a case fee. A total of 600 had one complaint brought against them and 200 had two complaints. Following changes introduced from April 1, two free complaints are allowed against firms each year before they are charged a case fee.
Cresswell reveals that just 200 IFAs had three or more complaints brought against them and a very small number of IFAs had a disproportionately large number of complaints against them – 60 had 11 complaints or more and seven had 31 complaints or more.
He says: “If three-quarters of IFAs can deal with vexations from consumers themselves, can it really be said that there is an over-arching complaints' culture? I would rather say that there is a consumer culture, with consumers now knowing where to turn. The minority of IFAs are not moving with this and are beginning to spoil things for the vast majority of IFAs who are.”