Complaints about historic advice jump 13%

Complaints about historic advice jump 13%

The number of complaints against advisers submitted to the Financial Ombudsman Service increased by 14 per cent last year, with historic claims seeing a rise of 13 per cent.

In its annual review published today (May 15) the ombudsman reported it received 1,915 new complaints about IFAs in the 2018/19 financial year, up from 1,678 in 2017/18.

The number of historic complaints against advisers, where the event being complained about happened more than 15 years ago, grew by more than 13 per cent jumping from 271 claims to 307. 

Self-invested personal pensions (Sipps) topped the list of the most complained about products against IFAs, with the ombudsman resolving 232 complaints with an uphold rate of 62 per cent. 

The ombudsman resolved 97 portfolio management complaints against IFAs and 95 occupational transfer complaints, with an uphold rate of 54 per cent and 47 per cent respectively. 

Caroline Wayman, chief ombudsman and chief executive of the Financial Ombudsman Service, called on advisers to ensure consumers are making the right pension choices.

She said: "Investment and pension complaints are at their highest level in five years. While self-invested personal pensions can give consumers more control over how and where their pension funds are invested, consumers and advisers need to ensure
this is the right vehicle for them.

"Decisions about pensions are some of the most difficult choices people make, and it’s important that consumers understand the risks involved when investing their pension pot."

Sipp related complaints also saw a significant increase in the wider complaint categories, driving a 42 per cent increase in pension complaints received by the ombudsman as the service witnessed growing discontent around provider due diligence. 

The Fos received 7,449 pension complaints in 2018/19, compared with 5,257 in 2017/18, with Sipp complaints almost doubling from about 2,000 in 2017/18 to 3,811 new complaints in 2018/19. 

The ombudsman reported two thirds of Sipp complaints are now brought to the Fos by a third party, such as claim managers and law firms, up from a third in the previous year and with the third parties generally acting for consumers in provider due diligence cases.

About 60 per cent of all Sipp complaints brought to the ombudsman service involved provider due diligence, while 15 per cent complained about the advice to transfer to a Sipp and invest in unregulated collective investment schemes.

The remainder of the Sipp complaints were about general administration and advice issues.

In total the ombudsman received 388,392 complaints in the last financial year, with an overall uphold rate of 28 per cent, a jump from the 339,967 received in 2017/18. 


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