The number of complaints from investors about advice received from financial planners, stockbrokers and fund managers has more than doubled in 2008, new figures reveal.
In the first four months of 2008 the Financial Industry Complaints Service has received 281 complaints, well over the 180 received over the same period in 2007.
And if complaints relating to the Westpoint collapse are removed, the contrast is even more stark: 269 in 2008 compared to just 66 over the equivalent period last year.
Stockbrokers experienced the biggest jump in complaints, up from 29 in the first four months of 2007 to 64 this year.
FICSc executive Amanda Maynard says the big increase in volatility experienced by financial markets over the first months of 2008 is the likely explanation for the complaint spike.
“When markets are volatile and falling, that causes consumers to look at what has happened and why they have sustained losses more than if the situation has been improving,” Maynard says.
“It tends to expose questions about whether people did get the right advice or receive adequate service – if an adviser is slow to sell something and prices go up people won’t generally complain, but if they come down it’s a different story.”
Despite the increase, however, Maynard says overall she believes the performance of the financial services sector and its responsiveness to consumer concerns has improved in recent years.
“In some ways given the increased amount of activity and the conditions it’s surprising the numbers aren’t up more, and in general we think advisers are managing client expectations and doing the advice job well,” she says.