Pension-related complaints by consumers will continue an uphill climb over the next year and are likely to be exacerbated by the radical pension changes announced in the Budget, law firm RPC has said.
The Financial Ombudsman Service’s complaints data, published in May, revealed a 49 per cent spike in self-invested pension and small self-administered pension scheme complaints, especially releated to advice to invest via a pension wrapper into underlying unregulated investments.
RPC said in its latest alert that it expects to see more pension related complaints over the next year, particularly relating to Sipps, following the alert published by the Financial Conduct Authority in April.
The alert warned that advisers need to be careful in ensuring their Sipp advice was suitable as the watchdog’s supervisory work found “very poor standards of advice” and that it expected further referrals to its enforcement division.
RPC also warned it expects “the inevitable confusion and opportunities for mistakes following the unexpected changes announced in the budget”.
The law firm also expects more complaints about unregulated collective investment schemes and more film finance disputes.
It stated it similarly expects the number of mortgage complaints to creep up at some point once interest rates start to rise and/or those currently on interest-only mortgages face being unable to repay the capital.
RPC added that whilst firms’ complaints handling practices might be improving, “we know that the FCA remains concerned that too many complaints go to the ombudsman”.
RPC’s legal alert said: “In September 2013 the FCA announced that it was going to conduct a review of complaints handling with the objective of reducing the number of consumers requiring the services of the Fos.
“The review will be done in two phases, with the first identifying how firms record and report complaints and the second considering firms’ approach to redress and root cause analysis.
“Therefore systemic issues and [market intelligence] will be at the forefront of the regulator’s mind this year and will be a very topical issue over the coming months – just as we may see more input from the FCA into complaints handling processes and redress options.”
