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| 2 minutes read

Complaints, canaries and coalmines

Is your firm an investment management, personal investment or pension firm?  Then pay attention.

In this brave new world of early and preventative supervisory interventions, it's important to search for early warning signs and anticipate new FCA areas of focus.  So you can pivot your resource towards addressing them and mitigating risks of supervisory intervention and enforcement.

The FCA's complaints data can be fertile ground for this.  It aggregates reports from firms to the FCA about complaints that firms receive from their customers.  The FCA is monitoring this data and might decide to weigh in where complaints are rising.

Working back from the latest data release, I've identified a few firm types, product groups and specific products that are in notable and sustained up-trends.  And indulged in a bit of speculation …


Issues may be emerging in relation to personal investment firms and investment management firms.  Such firms are facing rising complaints volumes.

This is despite complaints falling in relation to investment products generally.

Which suggests that firms whose primary businesses fall within those areas should take greatest notice.  (Perhaps e.g. full-service retail banks with an associated investment offering are less affected.)

And of those, investment management firms are feeling the greatest heat.  The redress they're paying is increasing rapidly (yes, even adjusted for inflation), whilst redress paid by personal investment firms isn't yet convincingly in an up-trend.


This data is pretty interesting.

We're seeing substantially increasing complaints volumes across the board.  Driven especially by non-workplace and workplace personal pensions, and in relation to drawdown and uncrystallised funds pension lump sums (UFPLS).

But the redress that firms are paying for these complaints is trending down.

What's going on?

My hunch: we're seeing more complaints about customer-facing processes and service levels.  And fewer complaints about, for example, underlying investment management or transaction risk e.g. around transfers/payments out.

A warning, then.  Don't get complacent.  In its Consumer Duty the FCA sets customer support expectations; expects firms to avoid unnecessary frictions in customer journeys; and includes non-financial costs (like service levels) within price and value assessments.  We may see redress expectations rise over time.


redress, fca, data, uk, complaints