Wealth managers lost 19% of their departing clients due to how a complaint was handled, research has found.
Simplify Consulting said the survey it conducted of consumers of wealth products shows complaints procedures across the industry “still leave a lot to be desired”. This is particularly concerning now Consumer Duty has been brought in.
The survey also found nearly half (44%) of clients found difficulty in complaining to their provider and a quarter of complaints raised were not dealt with to the customer’s satisfaction.
In terms of the specific issues with complaints handling, just under a third (31%) of survey respondents said that they were not kept up to date throughout their complaints process, while 75% said complaints took longer to resolve than anticipated.
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The issues are discussed at length in an Olympic-themed research paper titled Complaints: Going for Gold.
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. For wealth management firms, investments and pension related complaints have risen by 20% and 24% respectively between 2014 and 2023.
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“It is crucial that firms make it easy for the customer to be able to raise a complaint, via their preferred channel of choice, as customers will likely become even more frustrated – reducing customer loyalty as well as leading to reputational damage.
“In a world more driven by data than ever before, complaints are often undervalued and companies do not always sufficiently investigate the true reason and underlying cause of customer dissatisfaction,” she continued. “Wealth firms are facing a very real risk of losing out to competitors if they don’t.”
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