Wealth firms are losing up to a fifth of their clients due to complaints, according to new research from Simplify Consulting.
The research, which surveyed over 100 consumers of wealth products, showed a quarter of complaints raised were not dealt with to the customer’s satisfaction, prompting 19% to move wealth provider as a result.
Just under a third (31%) of those surveyed said they were not kept up to date throughout their complaints process and 44% found it was not clear who they had to contact or how to even make their complaint.
In addition, three quarters said complaints took longer to resolve than anticipated, with some customers waiting up to eight weeks after a complaint was raised to be informed that the investigation is ‘ongoing.’
According to the latest FCA data, financial services firms received 1.87 million complaints in the second half of 2023.
Kate Monserrate, director and co-founder of Simplify Consulting, 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 FCA-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.”
Simplify Consulting said firms must take a five-step approach to improving their complaints service proposition. This includes their complaints strategy; investigating and embedding root cause; process design; people and culture and technology.
Monserrate added: “It is crucial that firms make it easy for the customer to be able to raise a complaint, via their preferred channel of choice, as customers will likely become even more frustrated, reducing customer loyalty as well as leading to reputational damage. In a world more driven by data than ever before, complaints are often undervalued and companies do not always sufficiently investigate the true reason and underlying cause of customer dissatisfaction. Wealth firms are facing a very real risk of losing out to competitors if they don’t.”
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