Complaints about personal pensions to the Financial Ombudsman Service (FOS) have risen sharply according to new data. But lead ombudsman, Caroline Mitchell, says that the FOS supports advisers “more often than not,” in reaching its decisions.
The FOS accepted 751 personal pension complaints in the six month period between April and December. These include grievances about stakeholder pensions and retirement annuity contracts. Total complaints are well on course to exceed the 1,161 received in the prior year. Around a quarter (26%) are upheld.
Complaints about self-invested personal pensions reached 545 in the six months to September, on course to exceed the total of 951 in the prior year. Annuity complaints totalling 458 are also on an upward trend.
The rise is not being driven by one particular issue, a FOS spokesperson told Professional Adviser magazine. “We are starting to see complaints resulting from issues surrounding the new pension freedoms that came into effect from 6 April 2015. Otherwise the complaints brought by consumers cover a wide range of different issues including the suitability of the advice to take out a personal pension plan and the administration of these plans.”
Lead ombudsman, Caroline Mitchell has challenged the ‘myth’ that the FOS is pre-disposed to finding in favour of consumers. Speaking at the Alternative Investment Summit in London on 22 October, Ms Mitchell said that the FOS receives few advice complaints. Provided that advisers properly communicate the risks and possible outcomes to clients, she said that “there isn’t nearly as much to fear from us” as advisers think.
“Pension planning has always been a tricky area for advisers,” said James Burgoyne, Director – Claims & Technical, Brunel Professional Risks. “Advisers need to keep high quality, succinct suitability reports, fact finds and records of their discussions with clients. This will ensure that they have a solid defence if challenged by a client over the suitability of their advice.”
The six months’ complaints data has been reported in the October issue of Ombudsman News. Reports about the data and Caroline Mitchell’s speech to the Alternative Investment Summit have been published by Professional Adviser magazine.