Q. Where are complaints and remediation likely to spike and what can be done about it?
A. No business sets out to deliver a poor customer experience. But when something does go wrong, handling it well is your ticket to restoring trust and enhancing customer loyalty.
With the market still in flux, it is likely that client portfolios still have not recovered from the initial drop in value.
And while poor investment performance is not grounds for a complaint in itself, we all know that emotions run high when we are feeling the pinch financially.
On top of that, claims management companies will have started scoping new opportunities in response to Covid-19.
Knowing what lies down the track and preparing accordingly means you can handle complaints in a way that delivers value long after the case has been closed.
Source of complaints
So, where are complaints rising?
Pensions have long been the subject of complaints and it is unlikely to slow this year.
Regulatory activity is still in full swing, with the findings of the Financial Conduct Authority’s thematic review into defined benefit transfers to be unveiled this year, and the advice suitability review expected to follow shortly after.
Clients who transferred out of a DB scheme might now be missing the long-term security of a guaranteed income.
Likewise, those who opted for income drawdown have experienced the first major drop in the market since the pension freedoms and might now be thinking an annuity would have been the better option.
The FCA has previously voiced concerns about the suitability of equity release sales.
The current crisis is only likely to exacerbate that further, as clients under financial pressure seek a quick windfall by accessing to the cash wrapped up in property.
But will this be in clients’ best interests further down the line?
Self-invested personal pensions will have taken a hit and you might start seeing some complaints around the recommendation of a Sipp above a personal pension. Clients might claim that their portfolio contained too much risk.
How can you prepare? Make sure you have enough resource to deal with the spike in complaints.
Consider whether you can redeploy resource from elsewhere and can upskill staff quickly enough, or whether you need to augment your team with contractors.
The rise in vulnerability is universal and presents a further challenge for your client-facing staff.
Any FCA review or Financial Ombudsman Service escalation will likely bring additional scrutiny on the steps you have taken to support vulnerable customers and whether your advisers did the right thing in the circumstances.
Train your entire frontline team so they can handle a sensitive conversation with a client and spot even the most subtle signs of vulnerability.
Then, ensure your policies and procedures are flexible enough, empowering your staff to take appropriate action to meet the clients’ needs. Get ahead of the game with a deep dive into the high-risk areas of your business. Review a sample of files or take a more in-depth look at your existing business assurance data.