The Insurance & Financial Services Ombudsman Scheme has stated that advisers have a key role to play in helping their clients to avoid the problems which can lead to complaints.
“This role includes educating clients about the products they are buying and about their disclosure obligations and the consequences of failing to disclose,” the IFSO stated.
“This is the real value advisers add for their clients.”
The IFSO Scheme’s continuing professional development (CPD) training aims to help financial advisers, insurers, and other financial services providers to avoid future complaints, helping their adviser members especially, to resolve client dissatisfaction as early as possible.
The IFSO recently detailed the number of complaints about financial advisers in its annual report, which have remained low.
Complaint enquiries about advisers made up 3 per cent of the total (108 out of 3,357), while complaints accepted involving advisers was 2 per cent (7 out of 320), between 1 July 2017 to 30 June 2018.
Although complaints against advisers are low, the percentage of complaints on health, life and disability insurance is much higher, making up 41 per cent of complaints accepted between this time period and 15 per cent of complaint enquiries, with non-disclosure as one of the biggest complaint issues (see: Non-Disclosure Tops Health, Life…).
“Financial advisers have a key role to play in educating clients about their duty of disclosure and the consequences of failing to disclose,” says Insurance & Financial Services Ombudsman, Karen Stevens.
“Financial advisers can remind clients to tell their insurer everything when applying for insurance; if in doubt, disclose. They need to understand what information should be disclosed, why it is important to disclose, and what will happen if they don’t disclose – at law, there is likely to be no cover.”
The IFSO stated it categorises all complaints and complaint enquiries by product and sector.
“The complaints which relate to financial advisers are about the services provided by the financial adviser. Any complaints about the claims are recorded as complaints about the product provider,” it stated, adding:
“We do see some complaints about products where there could be issues with the adviser’s behaviour or advice but any complaint about the adviser would be dealt with separately, as the issues will be different.”
The top three complaint accepted issues involving advisers included:
- Fees and charges
- Reasonable care
- Standard of service
The top six complaint enquiry issues about advisers included:
- Fees and charges
- Customer service issues
- Misselling/misleading information/misrepresentation
- Standard of service
- Cancellation (or lapse) of contract
- Premiums