IFA complaints continue to drop
Complaints against independent financial advisers (IFAs) now make up just 1% of all disputes dealt with by the Financial Ombudsman Service (FOS).
In its annual review of personal finance disputes, the FOS – the body responsible for settling consumer complaints against the financial services industry – said that just 2,643 cases involved were quarrels with IFAs in 2011/12 – down 15% from the previous year.
The FOS, it says, receives some 5,000 enquiries and complaints every day, amounting to over a million every year. The small and decreasing fraction that is related to IFAs is likely to reassure potential investors in the current economic downturn.
Of the 2,643 complaints, 54% were upheld – the same figure that the FOS’ previous annual review had revealed.
Lee Smythe, an independent financial adviser at Smythe & Walter Chartered Financial Planners, said that the figures shown by the FOS’ annual review are a testament to the increasing acknowledgement of clients’ needs within the industry.
“The continuing fall in complaints against IFAs shows the commitment within the profession to work with clients to fully understand their requirements and goals before recommending suitable solutions from the whole of the market”, he said.
“This is rather than having to fit the client in to the range available as can be the case with some other areas of financial services, leading to less likelihood of client dissatisfaction.”
Complaints to IFAs accounted for 21% of all pension complaints, and 11% of investment complaints, and 3% of mortgage complaints.
But with total IFA complaints making up just 1% of the total disputes in 2011/12, by far the biggest area of contention was in the banks, with an overwhelming 65% of issues dealt with by the FOS directly attributed to the sector.
The FOS figures prove that an increasing number of people in the investment industry are having their financial plan realigned to suit their needs – but most importantly, these people are content with the work being provided by IFAs.
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