Tony HazellAug 16 2017

Financial system delivers on its duty of care

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Trawling through the letters sent to my Daily Mail Ask Tony column I am struck once again by how few actually concern financial services firms.

I suspect I have the biggest mailbag of all of the money section agony aunts and uncles. 

It is a reflection of the wide readership of the Daily Mail and of our deep bond with our readers. Details of consumer disputes pour in as letters, emails and phone calls. They concern energy companies, communications firms, car hire, holiday and air travel, HMRC and mail order or internet shopping disputes.

>Financial services firms seem to produce far fewer complaints then they used to

But financial services firms seem to produce far fewer complaints then they used to. This suggests it must be doing something right in the area of customer services. 

In fact, the industry has – for the most part – been moving in the right direction for a number of years, and perhaps does not always get the credit it deserves. Regulators, although regularly criticised by the likes of me, are, on the whole, a lot sharper than those in the energy, telecoms and travel sectors.

There is a highly effective Ombudsman service. This is in contrast to other sectors where, in my experience, ombudsmen can be ineffectual and produce some eye-raising decisions.

Some sectors, such as travel, seem to lack any effective consumer arbitrator, although they would no doubt dispute this.

Then there are the companies themselves. Financial services firms do get things wrong, and in some cases leadership decisions or pronouncements can be catastrophically anti-consumer.

Take RBS boss Ross McEwan’s assertion that banks do not have a duty of care to fraud victims. This is a PR disaster made by a man who is so wealthy he has lost touch with ordinary consumers. I wonder how he would feel if his gran had been taken for a ride by internet scammers?

But, for the most part, financial firms have become better at dealing with consumer complaints, and when there are mistakes it often seems to be down to an individual oversight rather than corporate mendacity.

Compare this with airlines and travel firms who do everything possible to make life difficult for those with genuine gripes, and car hire firms whose sole corporate purpose seems to be to deceive consumers.

Recently, my eye was caught by a pension case involving Hargreaves Lansdown. An investor had complained that he had been given inaccurate advice on his pension. Hargreaves had offered £113,000 plus interest and £1,500 for distress and inconvenience. Not satisfied, the man went to the Ombudsman and was awarded £112,000 instead.

A mistake had been made, the firm offered to put it right and when the customer persisted with the complaint the Ombudsman made a slightly smaller award than that already offered.

That’s an indication of a system that works for the consumer and the industry.

I’m not saying the financial services is perfect. Far from it. But it is on the whole a hell of lot better at dealing with consumer complaints than many of the other industries I write about.

Pension age changes aren't fair to women

I doubt anyone would argue that equalising the state pension ages of men and women is the right thing to do.

Given the relative life expectancy of the sexes, and increasing longevity and better health later in life, allowing women to retire at 60 was indefensibly outmoded. But the manner in which the changes have been made leaves a lot to be desired.

The acceleration introduced by the last government left many women who were in their 50s with very little time to plan.

The Institute for Fiscal Studies tells us that the reforms have delivered £5.1bn of Treasury savings. But at what a cost. Absolute income poverty has increased by 6.4 percentage points among women aged 60 to 62.

Smaller private pensions and lower wages are disproportionately concentrated on women in their early 60s – a point that appears to have been missed by some well-paid, well-pensioned male bloggers.

So while in the long term these changes will be fair to all, in the short term they are causing real hardship to some.

Ongoing probe into charging is welcome

The expansion of the FCA probe into ongoing adviser charging is welcome.

It is only right that investors have a clear idea of what they are paying and what they get for their money.

Earlier this year, the FCA published a review suggesting that 40 per cent of advisers were breaching the disclosure rules. Now it has asked for more information from 45 firms.

Being open, honest and clear should be central to any business built on client trust. 

Tony Hazell writes for the Daily Mail's Money Mail section