Ombudsman upholds a third of complaints against advisers

Ombudsman upholds a third of complaints against advisers

Just over a third of complaints against financial advisers were upheld by the Financial Ombudsman Service in 2016 to 2017.

Data published today (13 June) showed the Financial Ombudsman Service received 321,283 complaints but only 0.5 per cent of these involved financial advisers.

This means there were only around 1,600 complaints about financial advisers in total.

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Compared to the previous year there was a reduction both in the number of complaints and the proportion of all complaints – in 2015 to 2016 there were around 3,400 against IFAs which made up 1 per cent of all complaints the ombudsman handled.

Of the 1,600-odd complaints the Fos received about advisers last year, 36 per cent of these were upheld.

The ombudsman also published the number of complaints about IFAs where the event complained about happened more than 15 years ago, data which goes to the heart of whether a long-stop is needed.

In total there were only 161 complaints of this nature, making up just 7 per cent of all complaints against IFAs.

Caroline Wayman, chief ombudsman, said: “In changing times, it’s vital we maintain and grow people’s confidence in us.

“In last year’s annual review, we said we’d do all we could to support the small businesses we cover – committing to taking forward the Financial Advice Market Review’s recommendations for giving IFAs specifically more certainty about the ombudsman’s role.

“I hope the roundtables we’ve held with the FCA this year – in addition to our existing and long-standing engagement with IFAs and others – have gone a long way in giving reassurance that we’re on the same page, and always ready to talk.”

Of the complaints about IFAs, most related to self-invested personal pensions, with 242 complaints and 64 per cent of these upheld.

Most of the complaints which the Fos received – 52.5 per cent – were about payment protection insurance.

Investments and pensions accounted for 4.5 per cent of complaints while 12 per cent were related to insurance and 31 per cent related to banking and credit.

Excluding payment protection insurance (PPI), the single product which sparked the most complaints was current accounts, accounting for 25 per cent of complaints.

Within the investments and pensions category, the product with the most complaints was whole-of-life policies and savings endowments, accounting for 14 per cent of complaints.

Sipps and small self-administered schemes were the products accounting for the third most complaints in the investments and pensions sector, with 11 per cent of complaints.

Complaints about both of these products were up by more than a third from 1,174 to 1,574,

The product which saw the biggest increase in complaints was installment loans, where complaints went up by 318 per cent to 883 in total.