It’s not exactly breaking news that Financial Advisors operate in a notoriously difficult market place. As in any industry, some financial services companies get great reviews and some are not so great. It may well be that, for the Advisor, the negative feedback is difficult to comprehend, however there are a few ‘complaints’ that appear time and time again; Latest reports suggest that some companies may not even realise they are repeat offenders. So who is complaining and why?
Given the Government emphasis on future planning, it seems astounding that a recent Mintel report found that 44% of consumers said they lack an understanding of how financial services firms can help them manage their financial affairs, and over a third of people still feel the advice industry does not cater for “people like them”. The UK’s Financial Capability Strategy noted that confidence and ability in relation to financial matters varies – astonishingly one in five people cannot read a bank statement, and at least one third of the population cannot perform a relatively simple calculation to add interest earned to a savings balance. If that is the case, then surely education in such matters cannot start soon enough, and the Government should take more responsibility, starting with the curriculum.
Trust also seems to be a significant factor, following the past miss-selling of various products. Levels are high amongst those who already receive advice, but there is strong evidence to suggest that trust in Advisers is still low among the general population - Mintel found that less than half of consumers trust Financial Advisers to act in their interests and similarly, a recent PwC study found that fewer than a third of people (28%) had confidence in the services on offer.
There is also evidence of relatively low consumer awareness of the changes introduced by the RDR. This lack of awareness of new requirements and higher standards will no doubt have contributed to the consumer scepticism – although conversely a survey conducted for the FCA revealed that the proportion of respondents who thought that Financial Advisors make recommendations based on the best interests of their clients, has remained broadly stable over the years, at roughly 66%.
Although the number of complaints to the FCA have dropped in recent years, so have the number of Advisors. Notably, complaints relating to advising, selling and arranging increased by 1 percent in the second half of 2015, whilst general admin and customer service complaints reduced by nearly 5 percent.
So what are the most common complaints? Research shows that time and again investors feel that:
Aston Charles is aware that new regulations and, of course, the prospect of Brexit will stir the already choppy waters. But as the storm clouds brew, taking heed of the above may help you secure and retain worthwhile business, ensuring you stay afloat and, in the fullness of time, arrive safely on the farthest shore - preferably with a Pina Colada in hand!