Mis-selling and unsuitable advice now account for the majority of complaints made to the Financial Ombudsman Service regarding financial advisers, according to behavioural finance experts Oxford Risk.
According to the analysis, around 61 per cent of all new complaints in 2023 to 2024 related to these issues. There were around 1,459 new complaints regarding financial advisers in 2023 to 2024, and of these, 892, around 61 per cent, were about mis-selling or unsuitable advice, up from 48 per cent the year before
The proportion of advice-related complaints upheld by the Ombudsman dropped to 57 per cent in 2023 to 2024, down from 62 per cent the previous year.
Additionally, the most complained about product in 2023 to 2024 was defined benefit pension transfers not into SIPPs, which accounted for 368 complaints. This was followed by UCIS and non-standard investments with 241 complaints, standard investments with 169, personal pensions with 155, and stocks and shares ISAs with 123.
The data also shows that 205 resolved complaints in 2023 to 2024 related to advice or events that took place more than 15 years ago, and of these, around 45 per cent were upheld by the FOS.
Oxford Risk chief client officer James Pereira-Stubbs says: “Suitability of advice is clearly a major issue in the FOS figures and one that the financial adviser industry needs to address particularly given current volatility.
“It is important to bear in mind that complaints to the FOS about financial advisers make up a very small proportion of total complaints, and advisers deserve tools that make good practice and regulatory compliance easier with a tighter focus on client investment suitability.”
