Financial firms log a deluge of complaints from clients

Published:  24 Oct at 6 PM
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Consumers are lodging millions of complaints with the UK's Financial Services Agency over poor and unsuitable financial services.

Allowing a financial advisor to manage investments and savings can be seriously detrimental to the heath of your wealth, according to consumer watchdogs. IFAs, financial firms and banks have been hit with a deluge of complaints about mis-selling and poor advice over the first half of 2017, with the vast majority based on financial losses. Over 950,000 consumers are claiming they’ve been wrongly sold products not suitable for their needs by independent financial advisors.

Although savers and investors permanently resident in the UK are to some extent protected by the FCA’s rules, expat retirees who’ve transferred their personal pensions before emigrating may not be covered. Around 65,000 of the complaints related to investments, with a further 51,000 related to pensions advice, most of which concerned self-invested personal pensions, (SIPPS). Workplace pension advice complaints notched up 12 per cent of the total pension-related gripes, with annuities totalling 11 per cent and drawdown complaints at nine per cent. Endowment insurance policies accounted for 24 per cent of complaints about investment products.

Financial advice companies are required by law to submit details of complaints received to the FCA, in order for the financial watchdog to be able to analyse industry responses to customer needs. A recently introduced rule disincludes complaints which are immediately remedied, but over two billion sterling in compensation was paid to consumers during the first six months of 2017 by as many as 2,796 financial advice firms.

To the average pension saver or investor, the above numbers may seem staggering, but at least the consumers who lost money due to poor or totally wrong advice stand a change of getting some of their losses returned. For would-be expats who’ve been taken in by unprincipled or unprofessional advisors before they moved overseas, the chance of any reparation is slim. The financial advice industry has relied on jargon and sales techniques to earn its fat commissions for far too long, leaving consumers with little or no knowledge of the industry with nowhere to turn.
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