Complaints about mis-selling and suitability of advice are continuing to rise and are increasingly being upheld by the Financial Ombudsman Service.
Analysis by Oxford Risk showed suitability and mis-selling remains the most complained about issues for financial advisers.
The behavioural finance experts warned failure to address the growing regulatory focus will mean the industry is heading for a new record high of complaints.
Fos data for 2022/23 showed there were 884 resolved complaints against financial advisers for mis-selling and suitability of advice with 62 per cent of complaints being upheld.
This was higher compared to the previous year when there were 570 resolved complaints and 49 per cent of all complaints were upheld.
Oxford Risk pointed out complaints about mis-selling and suitability are significantly higher than any other reported issue and are growing year on year.
The second highest issue was complaints around administration and customer service with 503 resolved complaints and only 30 per cent upheld in 2022/23.
Greg Davies, head of behavioural finance at Oxford Risk, said: “Based on the data from the Financial Ombudsman Service, we expect to see record numbers of mis-sale and suitability of advice complaints upheld in 2023/24.
“The regulatory trajectory and directives from the Financial Conduct Authority such as the consumer duty show a growing focus on client investment suitability.
"Firms that seek to address the regulation in the spirit in which it is meant by following this trajectory will be better positioned to avoid these complaints than those that treat it merely as a tick-box exercise.”
When looking at all consumer complaints against advisers in 2022/23 just 41 per cent were upheld.
Other complaints included issues regarding charges, fees and commission which had 101 resolved complaints in 2022/23 with 37 per cent being upheld by Fos compared to 23 per cent the year before.
alina.khan@ft.com
