Complaints against advisers soar
Thenumber of complaints lodged against planners has risen dramatically over the last year, with inappropriate advice the most common complaint.
The Financial Industry Complaints Service (FICS) said the number of new financial planning complaints leapt to 186 last year, from just 83 in 2000. The figures are part of FICS’ annual report for 2001 made public this week.
Thirty-five per cent of complaints were for inappropriate advice, with complaints for misrepresentation and standard of service each making up 22 per cent of complaints.
The majority of complaints related to the investment of a single lump sum, although annual premium products and personal superannuation investments also came under fire.
The chief executive of FICS, Alison Maynard, says the rise in complaints against financial planners was directly related to a growing expectation amongst consumers about the quality of financial advice they receive.
“I think consumers are more sophisticated these days,” she says.
Despite the jump in complaints, most grievances against financial planners were resolved in favour of the planner. Of 110 complaints finalised by FICS last year, only 46 ruled in favour of the complainant.
The number of complaints about managed investments also rose significantly last year, with 80 new complaints received, up from 23 in 2000.
Misrepresentation and inappropriate advice were the most common grievances, with service and non-disclosure of fees and charges following closely behind.
But insurance brokers fared better last year, receiving 588 new complaints in 2001, 30 fewer than the 618 they received in 2000. In both years, most complaints related to denial of claim and service.
Despite the total number of complaints received by FICS across all sectors rising from 812 in 2000 to 988 in 2001, at least half of FICS’s rulings for each of the financial planning, fund management and insurance sectors were handed down against the complainant.
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