The delivery of service can occasionally go wrong in any business. When this happens in the regulated world of retail financial services, the recording and handling of a customer complaint is taken very seriously.
Firms which are authorised and regulated by the Financial Services Authority (FSA) must follow a defined process when it comes to acknowledging, responding to and reporting on client complaints.
Investors who are disgruntled with the service or advice offered by their financial adviser, bank or insurance company should complain to that company in the first instance.
If the company, after reviewing the circumstances of the complaint, decides not to uphold that complaint, the customer can refer to the Financial Ombudsman Service (FOS) in most cases.
In September 2010, the FSA started publishing firm-level complaints data every six months. This shows the number of complaints for every authorised firm where they have received more than 500 customer complaints during a six-month reporting period.
This complaints data represents more than 95% of the total number of complaints made by customers to financial services companies.
The FSA is keen to point out that the number of complaints recorded by each firm should vary in line with the total number of customer business conducted. You would typically expect to see a bigger business receiving more complaints.
It would certainly be useful to see the inclusion of the number of advisers for each of these firms alongside this complaints data, which would provide a better indication of how it compares to the sector-average.
The complaints data is categorised into business area, across the range of services on offer from financial services firms. This includes banking, home finance, general insurance, life and pensions, and investments.
Checking out the number of complaints received by a firm is an important part of the due diligence any investor should carry out when selecting a financial adviser. You can view the latest complaints data from the FSA here.
Whilst those firms included within this list will no doubt all have good excuses prepared for why they received so many complaints from their customers, the simple fact they are included within this data should set alarm bells ringing for savvy investors.
Here at Informed Choice, we understand that things can occasionally go wrong. What we believe matters most when this happens is that dissatisfaction is taken seriously and dealt with promptly. In our experience of receiving poor service from other financial services companies, it is the response to complaints that really counts.
Photo credit: Flickr/shining.darkness
