Embark holds highest Fos uphold rate of major adviser platforms

At 56 per cent, Embark’s uphold rate between January and November 2022 represented 23 claim resolutions. The rate has more than doubled between 2021 and 2022.

Most resolved complaints against Embark related to self-invested personal pension due diligence, provider due diligence, or 'administration or customer service'. 

No other platforms had a significant number of Sipp due diligence complaints resolved attached to their names, according to the Fos.

Embark, which was bought by Lloyd Banking Group last year for £390mn, currently has 61 open cases, of which 50 are about Sipp provider due diligence.

Embark’s intermediary distribution director, Ranila Ravi-Burslem, said Embark was aware the platform business “has in the past not met the high standards” its new owner, Lloyds, now sets.

She added: “To resolve this, we have invested heavily over the past year in both technology and personnel to ensure a better service for our customers, and that investment continues.

"We have already seen a sustained improvement in the feedback we are receiving and look forward to continuing enhancing our service further in 2023 and beyond."

Before its acquisition by Lloyds, Embark formed part of self-invested personal pension operator Rowanmoor.

Rowanmoor is now facing a barrage of Fos claims and a compensation bill to the tune of hundreds of millions after a claim was upheld which found it failed to meet third-party due diligence requirements.

The common theme between providers at the top is that they have all been through a lot of change.Mike Barrett, the Lang Cat

Quilter’s platform had the second highest uphold rate in the year to November, at 46 per cent with 48 resolutions, according to a Fos data request by FTAdviser.

Abrdn’s Elevate platform and James Hay came in joint third place, both with Fos uphold rates of 44 per cent. Elevate has had 18 resolutions so far this year, while James Hay has had 45.

Setting a precedent 

Mike Barrett, consulting director at the Lang Cat, said the requirement of the incoming consumer duty for providers to “avoid foreseeable harm” was currently subjective, but that it is likely the Fos will “set a precedent” to define what that means with example cases.

“The common theme between providers at the top is that they have all been through a lot of change, whether that’s ownership or a change in technology,” said Barrett.

“These changes could be interpreted as foreseeable harm that could be avoided. This extends to advisers - should I stick with a provider, or could I move the client and avoid foreseeable harm? Advisers should keep an eye on this.

“Lots of history shows technology migrations are very difficult. You can see how they will cause problems with customers and consumer duty. You can do these changes well over a number of years, but it’s really quite difficult.”

Quilter’s replatforming to FNZ was done over a series of tranches and cost the provider around £200mn.

James Hay advisers are currently waiting to be moved to a new FNZ platform, Abrdn has now mostly extracted its adviser platforms from Phoenix and onto FNZ, while Embark’s platform is also now on FNZ.

Overall, this is how all platforms fared:

Source: The Financial Ombudsman Service

Quilter's number has been calculated using an average across its two entities - Quilter Investment Platform and Quilter Life & Pension.

The Fos said it could not find any claims data on Praemium or Fidelity in its system. If claims resolved are fewer than 10, the Fos does not calculate an uphold rate.

Today, platforms are not held to the same standards of third-party due diligence as Sipp operators. 

Platforms are subject to the FCA's ‘Product Intervention and Product Governance Sourcebook’ - otherwise known as ‘Prod’.

By contrast, due diligence requirements for Sipp operators are a lot more specific.

They are expected to periodically review the due diligence they undertake in respect of the introducers that use their scheme, and to improve their processes where needed to identify and mitigate any risks to scheme members.

But as Barrett pointed out, any risks posed by third-parties to platform clients could throw up challenges for providers in the years to come as the consumer duty starts to trickle through into Fos decisions.

James Hay is currently facing 237 open cases over Sipp provider due diligence.

A spokesperson for James Hay said its current open Fos case figures were skewed by a historic issue.

The platform has 255 open cases, of which 237 related to Sipp provider due diligence.

“For legal reasons we can’t comment on specifics to do with the open cases, however it is important to highlight that almost all of those cases relate to one long-running historic matter dating back many years that is currently in the process of being resolved,” the spokesperson said.

“Once resolved, our open cases should reduce to more normal levels.”

On its uphold rate, the spokesperson said the platform always attempts to resolve complaints efficiently and fairly. 

They added: “We have invested substantially in our customer service function, and we will continue to do whatever is necessary to improve that experience. We will always cooperate fully with the financial ombudsman service.”

Fos numbers ‘don’t yet account for recent improvement’

Quilter’s adviser and client services director, Ant Scammell, said the platform had seen a decline in complaints made against it over the past year.

“We’ve also improved our complaint resolution rate, which currently stands at 95 per cent. These Fos numbers don’t yet account for that improvement,” he said.

“Our Fos referral rates are small in volume terms for our size of book and it is always our aim to avoid the scenario where complaints need to be resolved by the Fos."

Abrdn said it "always take[s] appropriate steps to ensure that we learn from [complaints] and where appropriate”.

It added: “We take reasonable steps to ensure that any recurring or systemic problems are flagged to the wider business areas for analysis."

 ruby.hinchliffe@ft.com