Registering a financial claim against an investment or advice firm that is still trading in the UK can be a lengthy and complicated process. The first stage is to complain directly to your service or product provider and wait for them to almost inevitably dismiss your claim. Independent financial advisers (IFAs) and pension providers are rarely in the habit of paying out to claimants in this first instance, as there is little legal or monetary incentive to do so. If a customer still maintains that the firm is responsible for financial losses, the complaint can be escalated to the Financial Ombudsman Service (FOS).
When the FOS mediates a financial claim, an independent ombudsman is charged with evaluating the relationship between the client and the authorised firm. They will consider the nature and suitability of the product or service, the clarity of all correspondences, as well as the underlying reason that the complaint has arisen, have been sustained. If they find that the firm is at fault, the ombudsman can recommend compensation be paid out to settle the customer’s financial claim. This might include covering financial losses and compensation for the time taken to settle the complaint.
The Reality of FOS Financial Claims
This example is a best-case scenario, and unfortunately, represents the minority of financial claims escalated to the FOS. Data released by the Ombudsmen earlier this year showed that just 35% of cases adjudicated by the FOS were upheld. When the spotlight was shone on the pension sector, this figure fell further to just 27%.
The latest data released by the FOS has shown an increase in the number of complaints made in the first half of 2018, but the uphold rate for financial claims now sits at just 30%. Usual suspects Sesame Limited, Openwork, and St James’s Place registered the highest volume of new complaints against them, but this did not translate into a proportional increase in the number of upheld financial claims against these most prolific firms.
Sesame received 103 new complaints, only 12% of which were resolved in favour of claimants. Openwork Limited received 66 new complaints with an improved uphold rate in the region of 23%, although this still falls below the FOS average across the financial claims sector at large. St James’s Place meanwhile registered 57 new complaints with an uphold rate as low as 15%.
Financial service providers are firmly regulated in the UK, but there is still plenty of room for error when it comes to conducting business in the first instance then attempting to redress those mistakes. Often, this comes at the expense of the consumer. The FOS was established as a form of final support for financial claimants to seek some form of compensation for financial losses, but this does not always transpire.
If you would like to know more about the success rates of financial claims, read our blog post: Analysing Pension Transfer Claims Success Rates.
Improved Financial Claim Success Rates with Money and Me Claims
Money and Me Claims is a specialist in the financial claims sector, with substantial experience dealing with customers at various stages of the compensation claim process. We have worked with clients to help them provide everything the FOS needs in order to gain a favourable result from their service or product provider, and increase their chances of compensation success.