The Financial Services Authority (FSA) has found no evidence small IFA firms are "fobbing off" mortgage endowment complaints, but has discovered some issues with complaints handling practices that firms must address.
The FSA looked at 412 complaint files in 51 firms and, with one exception, found no incidences of firms “fobbing off” mortgage endowment complaints or firms failing to investigate complaints received from clients, although rule breaches were identified in 39 firms.
One firm has been referred to the FSA’s enforcement division after the FSA found the firm was failing to investigate complaints received from its clients.
A total of 2,417 mortgage endowment complaints have been received by the sample population of firms since December 2001:
- 2,355 complaints have been rejected by firms;
- 562 complaints have been referred to the Financial Ombudsman Service (FOS);
- 42 complaints have been upheld by FOS in favour of the complainant;
- 292 complaints have been rejected by FOS in favour of the firm; and
- 228 complaints remain pending at FOS with a decision to be made on whether to uphold or reject.
The FSA also found “a significant number” of firms are not strictly adhering to rules which set out the time limits within which complaints must be dealt and with the general level of firms' internal complaints handling procedures.
Mike Lord, the FSA's head of investments in the small firms division, says: "The FSA is greatly encouraged to discover that small firms are not fobbing off endowment complaints and are investigating complaints properly. However, issues still remain with smaller firms not meeting the deadlines our rules set out or when complying with their own systems and procedures when they are dealing with customer complaints."
Lord says firms must have in place and make proper use of appropriate and effective internal complaint handling procedures to help ensure that customers are treated fairly. These include meeting the deadlines for corresponding with complainants and ensuring an appropriate person investigates the complaint. The FSA is publishing on its website information to help firms improve in this area.
He adds: "While we still see instances of firms not dealing with complaints properly, overall we were pleased with the decision making we saw firms making when undertaking this work."
The project was launched following concerns raised in independent research commissioned by the FSA to assess the level of compliance with regulations and to ensure customers are being treated fairly.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
Has run Cautious Managed fund since 2011
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