FOS receives hundreds of advice complaints about events more than 15 years ago

FOS data, published on Wednesday (3 June), showed the compensation service had received 1,635 new complaints about financial advisers in its 2019/20 financial year, down slightly from 1,915 in 2018/19.

As a portion of all new complaints from 2019/20, those against advisers made up less than 1% of the total 270,000 it received.

However, around 15% of those fresh complaints made against advisers were submitted about events that happened more than 15 years ago.

In 2019/20 the FOS resolved 253 cases in total relating to complaints from a minimum of 15 years ago. The total resolution figure is higher than the new complaints figure because it takes into account ongoing complaints from the previous year.

Some 103 of the cases were resolved on merit at an uphold rate of 30%, while 19 complaints were withdrawn or abandoned by the consumer.

A total 131 cases could not be considered by the FOS. This could be because, for example, the case did not fit into its six plus three time limit, meaning consumers need to contact FOS within six years of the event being complained about and, if more than six years have passed, three years from when they realised, or could reasonably have realised, there was a reason to complain.

Consumers must also complain to the FOS within six months of complaining to a provider, or the FOS does not take on their case.  

Personal Finance Society CEO Keith Richards said: "The percentage of complaints against financial advisers continues to account for less than 1% of the total complaints received by the FOS. The lack of a long stop means that 15% of the complaints relate to financial advice given more than 15 years ago, which shows the unique financial challenge faced by financial advisers. There are few other professions or sectors where what you recommended more than a decade ago could impact your livelihood today.

"This complaint data also highlights the challenge professional indemnity (PI) insurers face when it comes to offering affordable, comprehensive coverage for our profession and is why run-off cover is near extinct. While we acknowledge the Financial Conduct Authority and HM Treasury have a list of urgent priorities at present, the challenges being faced by advice firms, with pending PI insurance renewals and those who have had little option but to accept unacceptable terms or cease trading, is leaving the sector and consumers exposed."

SIPP complaints

The most common product complained about with relation to advisers was self-invested personal pensions (SIPPs), with 166 complaints resolved at a 59% uphold rate in favour of the client.

The FOS received 64 complaints against advisers relating to occupational pension transfers, of which it upheld 42%, as well as 59 complaints about portfolio management, of which also 42% of cases were upheld.

In 46 cases advisers received complaints about personal pensions advice, which were upheld 41% of the time.

The investments and pensions space more generally received 10,920 new complaints, with an uphold rate of 29%. Within that, the most complained about product was again SIPPs, with 2,606 complaints.

FOS chief ombudsman and chief executive Caroline Wayman (pictured) said: "The fundamentals of good customer service, and good complaint handling, are constant, and the majority of financial businesses know this. However, some businesses still need to put fairness first in how they handle customer complaints. A key part of our work in the future will be to proactively prevent complaints, to stop unfairness arising in the first place."

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