The number of complaints made to the Financial Ombudsman Service (FOS) over financial advice suitability is too high and still rising, according to Oxford Risk.
To compound this, the complaints are increasingly successful. FOS data for 2022/23 shows 62% of 884 mis-selling and suitability complaints were upheld compared with 49% of 570 the previous year.
The second highest complaint issue was administration and customer service, with 503 resolved complaints and only 30% upheld in 2022/23, Oxford Risk noted. These numbers have been virtually unchanged over the last three years.
See also: Advisers expect UK equities to bounce back and property to struggle
On average, 41% of all consumer complaints against financial advisers in 2022/23, were upheld.
Here is the full breakdown put together by Oxford Risk:
| 2022/23 | 2021/22 | |||
| Type of complaint | Number resolved | % upheld | Number resolved | % upheld |
| Mis-sale – suitability of advice | 884 | 62% | 570 | 49% |
| Administration or customer service | 503 | 30% | 687 | 29% |
| Mis-sale | 33 | 14% | 317 | 15% |
| Charges, feesand commission | 101 | 37% | 133 | 23% |
| Mis-sale – product not explained | 68 | 21% | 65 | 15% |
Dr Greg Davies, head of behavioural finance at Oxford Risk, said: “Based on the data from The Financial Ombudsman Service, we expect to see record numbers of mis-sale and suitability of advice complaints upheld in 2023/24.
“The regulatory trajectory and directives from the FCA such as the new Consumer Duty show a growing focus on client investment suitability.
“Firms that seek to address the regulation in the spirit in which it is meant by following this trajectory will be better positioned to avoid these complaints than those that treat it merely as a tick-box exercise.”
See also: HSBC private bank arm says it’s time for clients to take on more risk
