Adviser complaints up 70pc

A jump in the number of complaints about financial advisers has prompted Financial Services Complaints Ltd to warn advisers to take care with their record-keeping and communication with clients.

Wednesday, July 26th 2017, 6:00AM

by Susan Edmunds

The dispute resolution provider recorded a 21% increase in inquiries and complaints over the past year, up to 4365, and a 70% increase in the number of complaints about advisers.

Chief executive Susan Taylor said many of the complaints it received came from poor communication.

Insurance, particularly travel insurance, was the most complained about category. Complaints about personal insurance were rising in number, Taylor said.

“Many complainants say they were not given important information, or that the information they were given was ambiguous or poorly worded. Other times the complainant hasn’t disclosed certain information or simply hasn’t understood the information provided, be that the terms of an insurance policy or a written recommendation or plan.”

She said financial services providers needed to communicate with clients in plain English so that they understood the contracts they were entering.

“Equally, consumers need to communicate clearly and openly with their financial service provider and take responsibility for clarifying anything they don’t understand.”

Taylor said advisers were still a small number of complaints and inquiries overall - about 10%.

Some complaints about advisers related to replacement insurance, she said. Clients said they had previously had cover for medical conditions or events that they were no longer covered for by new policies.

Others were not happy with the quality and suitability of the advice they received, or were caught out by non-disclosure. Sometimes they argued that advisers told them not to disclose certain information, she said, while in other cases they had not been made aware of the consequences of non-disclosure.

"Sometimes another adviser has done a review and said 'I don't think these policies are much use to you'."

Lots of cases were misunderstandings, she said. "That's why we encourage advisers to keep good, contemporaneous file notes."

Sometimes written communication to clients was worded ambiguously, causing confusion.  In those cases, if more care was taken at the start, the complaint could have been avoided, she said.

Tags: Disclosure disputes financial advisers FSCL Travel insurance

« Bigger questions to ask of retirement policy: ReportLVR restrictions to be reviewed »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

www.GoodReturns.co.nz

© Copyright 1997-2020 Tarawera Publishing Ltd. All Rights Reserved