Financial Ombudsman Service  

Fos grapples with Woodford complaints

Fos grapples with Woodford complaints

Complaints related to the Woodford Equity Income debacle were "a prominent story in the investments sector" in the year since the fund was suspended, the Financial Ombudsman Service has said today.

In its annual data published this morning (June 3) the ombudsman said it had received Woodford-related complaints against the fund itself, against investment platforms and financial advisers relating to portfolios including the fund and advice to invest in it.

It said: "During the year a prominent story in the investments sector was the suspension of the high-profile Woodford fund.

"[Complaints] included disputes over whether people had been wrongly encouraged to invest in the fund, having had the ongoing situation misrepresented to them."

In March experts warned platforms such as Hargreaves could find themselves in the crosshairs, particularly if consumers feel they have been misled by them.

At the time the Fos had received 30 complaints about Woodford IM, but it is unclear who they were against.

However, the Fos saw a fall in the number of complaints against advisers overall.

It reported it received 1,635 new complaints against advisers in the 2019/20 financial year, a drop of 15 per cent on the 1,915 reported in the previous year. 

Whereas in 2018/19 the growing number of complaints made against advisers was partly driven by an increase in historic claims, those concerning an event which happened more than 15 years ago, these types of cases reduced this year to 241.

This year the average uphold rate against advisers ticked up slightly to 35 per cent, compared with 33 per cent in 2018/19, but fewer cases were upheld against advisers in the four most complained about product categories. 

Once again self-invested personal pensions (Sipps) topped the list of the most complained about products against advisers with the ombudsman resolving 166 complaints in 2019/20, but the uphold rate in these cases dropped slightly to 59 per cent. 

Product

2019/20

2018/19

Sipps

59%

62%

House mortgages

21%

26%

Occupational pension transfers

42%

47%

Portfolio management

42%

54%

Uphold rate for four most complained about products in complaints against advisers. Source: Financial Ombudsman Service

The ombudsman resolved 64 occupational transfer complaints against advisers and 59 portfolio management complaints, both with an uphold rate of 42 per cent.

The ombudsman also warned it was still hearing from consumers with complaints about investment problems, including those who had issues accessing and managing their investments which in some cases had affected their income payments or pension withdrawals.

Caroline Wayman, chief ombudsman and chief executive of the Fos, said the service had resolved in excess of a quarter of a million complaints in the most recent year.

She warned some businesses in the financial services industry still needed to "put fairness first" in handling customer complaints. 

Ms Wayman said: “The fundamentals of good customer service, and good complaint handling, are constant, and the majority of financial businesses know this.

"However, some businesses still need to put fairness first in how they handle customer complaints. A key part of our work in the future will be to proactively prevent complaints, to stop unfairness arising in the first place.