Regulation  

Pru tops FCA life and pensions complaints list

Pru tops FCA life and pensions complaints list

The Financial Conduct Authority’s latest complaints data has echoed that published by the Financial Ombudsman Service last month in finding Prudential the most complained about firm in the life and pensions sector.

In the ‘decumulation, life and pensions’ product group, which will be under scrutiny ahead of pension changes next week, the firm had the largest number of complaints opened in the second half of 2014 with 6,209.

However, if Aviva (4,153) and Friends Life (5,188) are counted together - they are in the final stages of completing a merger to create the largest insurer in the UK - they would leap far above Pru with a combined total of 9,341 new claims.

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On the whole complaints relating to the category decreased by 19 per cent in the second half of last year to 61,019 complaints.

This fall was driven by reductions across all products in the category but notably complaints about personal pensions and ‘free standing additional voluntary contributions’ and related to endowments, which decreased by 19 per cent and 20 per cent respectively.

Together, those two types of products represented 74 per cent of life and pensions complaints. Around half of the opened complaints were related to general administration and customer service and 39 per cent to the advising, selling and arranging of those products.

In terms of investments, Santander topped the list with 4,278 complaints, followed by Barclays Bank with 2,576, Yorkshire Building Society with 2,240, HSBC with 1,853 and Bank of Scotland with 1,059.

In total there was a 5 per cent decrease in investment complaints to 44,010 in the second half of last year compared to 2014 H1, which was driven by a general decrease across five of the seven product categories.

Two product categories, structured products and unit trusts/open ended investment companies, represented almost a quarter of these complaints and saw significant increases of 115 per cent to 3,772 complaints and 62 per cent to 6,969 complaints respectively during the period.

Regarding the causes of complaints, 59 per cent of investment complaints were related to general administration and customer service in 2014 H2, with 28 per cent concerning the advising, selling and arranging of the products.

Overall complaints decreased by 7 per cent, compared to the previous six months, and by 12 per cent from the same period in the previous year.

Christopher Woolard, the FCA’s director of strategy and competition, said that while the overall decreases should be welcomed, there is still more for financial services firms to do.

“The FCA’s challenge to those firms is to put the necessary measures in place to ensure we see a consistent fall across all sectors.”

The total redress paid increased by 4 per cent to £2.44bn in the second half of 2014, from £2.34bn in the first half of the year, with 88 per cent related to general insurance and pure protection products, which include PPI.

peter.walker@ft.com