IFAs account for just 1% of claims
IFAs accounted for just 1% of complaints referred to the Financial Ombudsman Service (FOS) in the 2011/12 financial year, as complaints against advisers continue to fall.
FOS's annual review, published today, shows there were 2,644 complaints against IFAs referred to FOS in 2011/12, down from 3,092 the previous year.
As a proportion of all complaints, IFA complaints have now fallen from 2% of cases in 2009/10 to 1.5% in 2010/11 and 1% in 2011/12.
FOS said this reflects the steady decline in the number of complaints relating to investments and pensions.
The Ombudsman upheld 54% of cases against IFAs in 2011/12. Overall, it upheld 64% of all claims received, up from 51% the previous year.
Claims for payment protection insurance dominated FOS’s workload over the past year, accounting for 60% of new cases. The next most complained about product was credit cards at 7% of cases.
There were 157,716 complaints received about PPI in 2011/12, up from 104,597 the previous year.
Complaints about income protection (IP) and critical illness (CI) also increased. IP complaints rose by 34%, from 720 in 2010/11 to 965 in 2011/12, while CI complaints increased by 55%, from 528 to 817.
Complaints about private medical insurance rose marginally, from 506 in 2010/11 to 513 in 2011/12.
Meanwhile whole-of-life policies and savings endowments complaints were up 26%, from 3,328 to 4,186.
Natalie Ceeney, chief ombudsman at FOS, said: “This year's been a struggle for many consumers, who've found themselves burdened by debt, besieged by claims companies and bewildered by the complexity of financial services. This has made our work at the ombudsman service more challenging – but more crucial – than ever before.
“I believe there's something we can all learn from what we've seen this year – to help prevent future problems and complaints. What's gone wrong in the past doesn't need to happen again.”
In response to the figures, the Association of Independent Financial Advisers (AIFA) called for the regulator to recognise the falling number of complaints against IFAs by paying a regulatory dividend to firms.
Chris Hannant, policy director at AIFA, said: “It is extremely positive that complaints against advisers continue to fall and shows that advisers are looking after their clients. The regulator now needs to recognise this in its approach to the profession.
“Advisers have responded to the demands of the Retail Distribution Review and the Financial Services Authority(FSA) now needs to deliver on its promise of a regulatory dividend for firms. Unlimited liability of advice and rising PI premiums, due to the retrospective actions of the FSA, are damaging the profession. The regulator needs to act now to deliver a fairer outcome for advisers.”