What is worse than having to complain about poor service? What about then having to complain about how your complaint is being handled – or not handled as the case may be. That’s just compounding a bad situation isn’t it. Well unfortunately the Complaints Commissioner has once again this week raise what it describes as “considerable concerns” over the Financial Conduct Authorities (FCA) handling of complaints. Given that FCA write the rule book for Financial Advisers including setting strict standards for the handling of customer complaints – this is not good.
The Complaints Commissioner drew attention to a number of cases where the FCA simply hadn’t dealt with the customers complaints within the required timescales, including one cases where a customer had to wait eight months for a response! The FCA have said that they are taking the matter very seriously and are addressing their procedures. When the details were revealed it seems puzzling that they have a problem. In 2018/19 they only apparently received a total of 169 complaints in total, of which 18 were driven to complain – that’s 10%. It seems that FCA have 4.5 full time staff dealing with complaints, so that’s 37 complaints per person to deal with, that doesn’t seem unreasonable does it? Regardless, the FCA is now saying its going to increase the number of employees to 12.5 in order to deal with the backlog.
It is vital that the FCA is able to show leadership in the area of complaints handling to set an example to all Financial Services businesses that complaints must always be taken seriously and dealt with properly as you’d expect.
In our view the majority of potential complaints can be dealt with as long as you act quickly and demonstrate to customers that you are dealing with their concerns quickly. More often than not, that is enough, and the matter can easily be resolved. In our professional environment, most complaints tend to be about service rather than actual advice issues, which are rare. But it does sometimes happen, hence the year on year increases in the Financial Service Compensation Scheme (FSCS) levy charged to Financial Adviser firms. Quite often though the source of future complaints is quite obvious, the problem is that the cause s are not dealt with quickly enough. PPI is a classic example and there may be others on the way.
Take for example the move by a number of providers to provide direct access services to pension holders using “pathways” to “guide” consumers through their drawdown options. It seems to us that this broad-brush simplistic approach is bound to end in tears. Customers will undoubtedly misunderstand the “guidance” and make poor decisions leading to what the FCA often calls “customer harm”. Providers will claim that they didn’t advise and that they only provided guidance, but ultimately, it’s inevitable that the FCA and FSCS will decide that customer protection is paramount and there will be compensation to pay. The question then is who will pay the bill – providers or advisers? One of the reasons advice isn’t more widely available is that the costs of advising (professional indemnity insurance, FCA fees, FSCS levies etc) are so high, so it’s a self-perpetuating circle that won’t end until the FCA gets to grips with the situation.
We are proud to be able to say that we have never had a compliant about our service. Touch wood, but we do pride ourselves on our service levels and genuinely put our customers at the heart of our business.
Let’s hope the extra employees improve the FCA’s service levels.