Wealth firms lose 19% of their clients due to poor complaint procedure, according to a new research paper by Simplify Consulting.
The Olympic-themed research paper - 'Complaints: Going for Gold' features a survey of over 100 consumers of wealth products (including workplace pensions, ISAs and/or life insurance products) to determine why people complain and how this can shape a world class complaints service.
The research found:
• Nearly 1-in-5 (19%) said that they had moved wealth providers because of their complaint
• A quarter (25%) of complaints raised were not dealt with to the customer’s satisfaction.
• Just under a third (31%) of respondents claimed that 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, suggesting that a large proportion of customers continue to face barriers to voicing and expressing dissatisfaction.
• 75% of respondents said complaints took longer to resolve than anticipated.
With some customers waiting up to eight weeks after a complaint was raised to simply be informed that the investigation is ‘ongoing’, the results show that there is still an urgent need for firms to improve their handling of complaints as well as meet or exceed customer expectations.
The introduction of the Consumer Duty has put increased pressure on wealth firms to ensure robust processes are in place when dealing with complaints as well as prioritising customer care. Whilst complaints have always provided important metrics for firms, it is now mandated that firms understand where outcomes haven’t been right for customers, and complaints are the most direct way of identifying that.
Latest findings from the FCA state that in 2023 H2, financial services firms received 1.87m complaints.
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 Financial Conduct Authority (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.”
In the research paper, Simplify laid out five key Olympic events to analogise how to shape and deliver a gold standard Complaints Service Proposition:
1: Archery (Complaints Strategy)
2: Rowing (Investigating & Embedding Root Cause)
3: Relay Race (Process Design)
4: Football (People & Culture)
5: 100 metre sprint (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.”
