Latest figures from the Financial Ombudsman Service (FOS) show that investment advice complaints are down.
But, in the six months from July to December 2022 the overall number of complaints increased to 79,921 from 72,978 in the six months before. A 9.5 % increase. But where are the complaints coming from?
Banking and Credit Cards is the answer. Closely followed by General Insurance and Protection.
Banking complaints increased by 14% over the six months.
This is perhaps surprising because the FCA has just issued a report claiming that it has saved customers £1 billion in fees over the last four years. These they say are as a result of their rule changes in 2019 and 2020 which cracked down on charges for unplanned and unauthorised overdrafts.
However, there were only 3,842 complaints about pensions, a reduction of 8% and only 2,227 complaints about investment advice. Between them 6,069 complaints which is 7.5% of the total. In other words, not a lot considering the size of the market at £1.4 trillion.
Despite this the FCA announced that they are increasing fees to investment advice firms by 9% next year. Many firms will just pass this increase straight on to clients through higher charges.
Separately the FCA has released data on the number of complaints received by financial services firms. This is distinct from the number of complaints received by the FOS. Complaints will only reach FOS if the customer is not satisfied with the outcome of their client from the provider firm in question.
The overall number of complaints fell by 6% in the second half of 2022.
The FCA also published details about the percentage of upheld complaints by firm. This could be a good or a bad thing. On the one hand it could indicate that all claims were justified. Or it could indicate that the firm had taken the decision to always compensate complains. Some of the firms upheld complaints rates included Scottish Widows 93%, LV 95%, Sun Life 87% and St James Place 78%.
It does make you wonder about the number of complaints when you see you see figures from the latest survey by Simplify Consulting. They found that:
- 47% of customers read “very little” of the information sent by product providers
- Only 14% read all the documents
- But 16% didn’t read anything at all.
So why didn’t people read the investment advice information provided?
- 64% said it was too long
- 50% didn’t have enough time
- 45% didn’t understand the documents with too much jargon
- 30% said it wasn’t in plain English
- And 30% said they didn’t think they needed to read it (they might have a case if it’s been properly explained)
In a separate survey. Investec found that almost 20% of couples said that they had hidden details of their finances from their partner. This included savings (at an average of £22,500) and debt (at an average of £8,800). Those between 35 and 55 were the most likely to have hidden savings, whilst only 13% of over 55’s were hiding their money.