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Advisers split on outsourced complaint handling appeal

Advisers split on outsourced complaint handling appeal

Advisers are split as to whether a newly launched complaints handling service aimed at advisers has potential, with one adviser stating that firms need to concentrate on ensuring they have a good system in place for themselves.

Last month, a former financial adviser and PI broker launched a complaint handling service, AHK Regulatory Response, which provides a subscription outsourcing service to advisers, including professional complaints handling and independent investigations.

The company will look at a complaint and put together an impartial executive summary for an advisers. Advisers will pay a fee per month plus larger fees for up to five complaints, while those dealing with more claims will pay a higher tiered rate depending on volume.

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For less than five complaints a year, the subscription is £15 per adviser per month, including a helpline, newsletter, guides and regulatory information. Once advisers receive a complaint, AHK will charge £150 to administer the complaint.

The tiered system beyond this ranging from a monthly fee of £135 to £450, plus additional case fees if the amount of complaints exceed the threshold.

Leeds-based AHK is a spin off business from law firm Kennedys. The turnaround time for cases should be around two weeks once they receive the client file, the firm told FTAdviser.

Derek Humphrey, a former financial adviser and director at AHK said that complaints against IFAs have risen in recent years and organisations have found it “challenging” to ensure they are investigated fairly and swiftly.

“With volumes expected to remain high in 2015, many firms will struggle to demonstrate FCA compliance while handling complaints.”

Mr Humphrey said: “Once we have the client file we will look at the complaint, write an executive summary on the complaint which includes weaknesses that we see and we will then send a final decision letter which is approved by law firm Kennedy’s.

“If there is cause for concern we would highlight that. The adviser would send the report to their PI insurer/broker, and we would await instructions as to what to do - to offer redress etc and they we would send out an offer letter.

“We think our service is quite unique, as we offer impartiality and efficiency.”

Martin Evans, director at Prism IFA, told FTAdviser that he can see this service being attractive to sole traders as they do have a “problem with impartiality”.

He said: “I already pay someone for compliance so I would not use the service. I have quite a few friends who are one-man bands and I don’t know if they would pay £15 a month as a retainer, but more interested to pay when they receive a complaint.

“I can see how this would be something that is attractive to those advisers as it is difficult to be impartial in that position.”

Alan Lakey, partner at Highclere Financial Services, told FTAdviser: “It may well appeal but the networks will do their own things, so only DA or those people who want to have files reviewed would use it.