Leaving a financial adviser to manage savings and investments can be seriously damaging to your wealth, according to complaints statistics from consumer watchdogs.
Banks, financial firms and IFAs are tackling a deluge of complaints from the first six months of the year.
Consumers have lodged millions of complaints with the Financial Conduct Authority.
Top of the list of gripes are almost a million complaints that financial firms have offered unsuitable advice that has led to a financial loss.
This category makes up 29% of all complaints in the sixth months to the end of June 2017 – more than 951,000 consumers have argued that IFAs have wrongly sold them unsuitable products.
Number of complaints falls
Another 1.5 million complaints covered poor administration and customer service (616,000); unclear guidance (453,000); failing to follow instructions (337,000), disputes of fees and charges (274,000) and delays in implementing advice (267,000).
Over 3 million complaints were about banks and insurance, including payment protection.
Just over 51,000 related to pensions and 65,000 to investments.
Most of the pension complaints (57%) were about self-invested personal pensions (SIPPs). Workplace pensions accounted for 12%, while annuities comprised 11% of the total and drawdown another 9%.
Moans about investment advice covered two main categories – endowment insurance policies and ISAs – which each make up 24% of investment complaints.
In the first half of 2016, 2.06 million complaints were reported by 2,796 financial advice firms, compared with 3.32 million reported by 3,160 firms for the same period of 2017.
Change in way complaints recorded
The increase is explained by the FCA changing reporting procedures.
“The previous return firms had to send us did not include complaints which were resolved by the end of the next business day,” says the FCA.
Advice firms have paid out £2 billion compensation to consumers in the first half of 2017.
Christopher Woolard, the FCA’s executive director of strategy and competition, said: “We now require firms to report all complaints which gives us a fuller picture of where the industry might not be meeting customer needs. But even allowing for the change in reporting rules, and some progress made, the numbers are still significant.
“Firms need to do all they can to reduce complaints and ensure that they are working in the best interests of consumers.”
