One in five wealth firms lose clients due to poor complaints procedure

Almost one in five (19%) wealth firms have lost clients due to poor complaints procedures, Simplify Consulting has revealed.

The firm’s research paper, Complaints: Going for Gold, featured a survey of over 100 wealth product consumers, including workplace pensions, ISAs and life insurance products.

Simplify Consulting found that a quarter (25%) of complaints raised were not dealt with to the customer’s satisfaction, while 31% of respondents claimed they were not kept up to date throughout their complaints process.

Furthermore, 44% of clients said it was not clear who they had to contact or how to even make a complaint, with the firm suggesting that a proportion of customers continue to face barriers to voicing and expressing dissatisfaction.

The research also revealed that some customers have waited up to eight weeks after a complaint was raised to be informed that the investigation was ‘ongoing’, implying there is an "urgent need" for firms to improve their handling of complaints.

This is supported by 75% of respondents stating that complaints took longer to resolve than anticipated.

Simplify Consulting added that the introduction of Consumer Duty has put increased pressure on wealth firms to ensure robust processes are in place when dealing with complaints, as well as prioritising customer care.

Director and co-founder at Simplify Consulting, Kate Monserrate, 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 Financial Conduct Authority-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.

"It is vital that complaints are not just dealt with in a swift and satisfactory manner but that firms leverage the insight from complaints in the right way. That way, we’ll see how complaints can be transformed from a necessary, but low-key must-have for most firms, into a vital mechanism to understand where, and why things have gone wrong for customers."

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