Wealth managers are losing a fifth of customers due to poor complaint procedures, bringing into question the state of the colossal industry, a new study has revealed.
A total of 25 per cent of customers who filed a complaint said that the problem was not dealt with to the customer’s satisfaction, research from Simplify Consulting has found.
The UK introduced Consumer Duty last year to address this exact issue, but the introduction of the new rules may have instead put greater pressure on companies by increasing the number of complaints they get.
Complaints have been piling up against wealth managers, leaving some customers waiting up to eight weeks to hear back, only to be informed that the investigation was ‘ongoing’.
In the second half of 2023, financial services firms received 1.87 million complaints, according to data from the Financial Conduct Authority. Investment and pension related complaints have risen by 20 per cent and 24 per cent respectively over the last decade.
Now, research has found that 31 per cent of respondents claimed that they were not kept up to date throughout the process of making a complaint.
Meanwhile, 44 per cent found it was not clear who they had to contact or how to even make one, while a total of 75 per cent of respondents said complaints took longer to resolve than anticipated.
Kate Monserrate, director and co-founder of Simplify Consulting, said: “The long-term trends show an industry that still hasn’t managed to move the dial significantly on complaints. We still see complaints across all FCA regulated firms increasing over the last 10 years, even if they have come down from the PPI and Covid peaks.”
“It is vital that complaints are not just dealt with in a swift and satisfactory manner but that firms leverage the insight from complaints in the right way. That way, we’ll see how complaints can be transformed from a necessary, but low-key must-have for most firms, into a vital mechanism to understand where, and why things have gone wrong for customers.”