Certain products which financial advisers regularly recommend have seen significant increases in the numbers of complaints being received by the Financial Ombudsman Service (FOS).
In the three months from July to September 2015, the FOS received 458 complaints about personal pensions, which represents an increase of 39% compared to the same period in 2014.
Complaints about self-invested personal pensions (SIPPs) rose by 34% to 281.
The figure for stocks & shares ISA complaints has risen by 29% to 327.
An increasing number of claims management companies are now assisting with claims for mis-sold pensions. Common reasons for making a personal pension or SIPP complaint include:
• The fund (s) or underlying investments recommended do not match the client’s attitude to risk and/or capacity for loss. Contrary to what some advisers believe, they are also responsible for ensuring the underlying investments in a SIPP are suitable for the client, as well as ensuring the product itself is appropriate
• The risks involved with the fund (s) or underlying investments were not explained to the client at point of sale
• A recommendation has been made to transfer from one pension arrangement to another, and the reasons as to why this was recommended are unclear. A pension switch or pension transfer may not be suitable if the new arrangement has higher charges, or if there are penalties imposed for switching, or if the client has given up valuable benefits (e.g. bonuses, guaranteed annuity rates) in the old pension
• A SIPP has been recommended for no apparent reason. Many SIPP clients are paying the higher charges associated with this type of plan when they do not need the increased investment flexibility that a SIPP offers, and their aims and objectives could have been met just as easily by a conventional personal pension
The FOS received a total of 85,896 complaints during the quarter, which is almost the same as for the equivalent period in 2014. Payment protection insurance (PPI) continues to account for more than half the total, with 49,672 cases. Packaged bank accounts is the second most complained about area, with 10,163 cases.
Of the total complaints closed by the FOS between July and September, 51% were upheld. The FOS found in the customer’s favour in 72% of PPI cases, 47% of SIPP cases, 37% of investment ISA cases and 27% of personal pension cases.
In her foreword to the October 2015 issue of Ombudsman News, chief ombudsman Caroline Wayman suggested that firms could learn lessons from having complaints upheld.
Ms Wayman commented:
“I hope we can either provide reassurance that [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][firms have] done their best by their customer – or help them to recognise and learn from what hasn’t gone well.”
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.