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Barclays has reported a 77% rise in investment complaints made to the Financial Services Authority (FSA) in 2011 driven by the £7.7 million fine it received from the regulator for mis-selling two Aviva funds.
FSA complaints relating to Barclays’ sale of retail investments, pensions and insurance products all increased in 2011, despite overall complaint numbers at the bank falling.
Complaints relating to investments rose 77% in 2011 to 7,194 from 4,067 in 2010.
Complaints relating to life and pension products were 4,511 in 2011, up 33% from 3,359 in 2010.
Barclays said the rise in complaint numbers in the first half of 2011 was driven by the £7.7 million FSA fine it received for mis-selling Aviva funds in January 2011.
It said: 'The rise in investment complaints in 2011 was driven by complaints resulting from an FSA fine in January 2011 over the suitability of advice for customers sold the Aviva Global Balanced Income Fund and Aviva Global Cautious Fund between July 2006 and November 2008.
'We have said we are sorry for this, we are focused on putting it right and we have taken steps to ensure it does not happen again.'
The FSA said advice failings led to 12,000 investors being mis-sold investments. It found a number of serious failings in the way that Barclays sold the Aviva funds, leading to the bank paying £17 million in compensation to investors.
Total complaints were down 6% overall and Barclays said it predicted further reductions in complaint numbers in the first half of 2012, excluding those related to payment protection insurance (PPI).
PPI accounted for a significant volume of complaints in 2011, 38,187 out of a total of 292,299.
Antony Jenkins, chief executive of Barclays Retail and Business Banking said: ‘Tackling complaints is our top priority and today’s figures show real sustained progress on delivering on our commitments, with a reduction of over 30 per cent in banking complaints.’
‘We can and will do more to improve service and go further and faster to drive down complaints. We are aiming for further significant reductions in underlying complaints in the first half of 2012 as we continue on our journey to get it right first time, every time, for our customers.’
Comments (14)
I presume this is historical business as barclays have stopped advising on retail products (bancassurance)?
14:25 on 22 February 2012
Absolutely no surprise, since they canned all their advisers, any client coming in with any question is logged as a complaint as the retail staff are not authorised & are unable to field or help with the slightest query.
14:29 on 22 February 2012
horses, carts, stable doors...
14:34 on 22 February 2012
I can imagine most of this increase comes from a number of strategic decisions Barclays made last year:
1 They axed their entire sales force, thus leaving investors with no-one to talk to about the lack of performance of their investment portfolios. Result, complaints!
2 The sale of the investments to Windsor Life, sorry, ReAssure, thus getting paid for their renewals in advance. Thus ensuring the level of complaints will reduce going forward, as they can just be forwarded to another firm. Expect the level of complaints to ReAssure to increase. Result, Complaints
3 The marketing of opaque investments with complex offshore structures, the Global Cautious and Global Balanced Income funds, that lost customers a lot of money, cost Barclays over £17 million in compensation, and a fine of £7.7 million. Loads of complaints there!
Barclays inherited a fairly competent IFA sales force, marketed to all customers, not just the HNW when it took over Woolwich. Did it expand that service to give customers proper independant advice? No, it wanted to shoehorn customers into either it's own high charging products, or to strategic 'partner' companies that paid them up to 9% upfront commission.
One of these days the bosses will learn that Banks' access to a huge customer list does not give them the right to treat customers unfairly.
14:42 on 22 February 2012
And, just for the purposes of balanced reporting, may we know the percentage decline (assuming there has been a continuing decline) in the number of complaints against the IFA sector?
It would also be interesting to know the percentage increase/decreases in customer complaints against all the other banks and building societies.
Complaints against my little IFA practice, BTW, remain unchanged. Zero.
14:49 on 22 February 2012
Julian
Google FOS and there is stuff about the Complaints data available.
http://www.financial-ombudsman.org.uk/publications/complaints-data.html
http://www.ombudsman-complaints-data.org.uk/
You can also contact the FOS direct and ask for them to send you the info.
15:35 on 22 February 2012
Are Barclays worrried - No
The Trail (sorry adviser agreed charging) more than ensures enough income stream for the coming years to pay for any complaints.
Along with this - there are rumours they are starting an adviser force again for the HNW as if these clients leave then the trail ceases.
As for Mrs Miggins from the street who walks in from the street and is aged 80, we'll upgrade her to HNW status and invest her money into these structured products (or financial weapons of mass destruction as they should be called) - all without advice dare I say.
Sounds like the game Monopoly to me.
15:57 on 22 February 2012
Barclays complaints up 77%
SJP pre tax profit up 30%
and which story is most interesting/attracts most negative comments?
As night follows day, the trolls are stirred from their barstools to barb and yelp like a pack of Dennis Skinner's
16:24 on 22 February 2012
To Chartered Mark ~ Thanks for the pointers, though the salient data available therefrom ought, I would have thought, to have been included in this article, just so we can see how the levels and trends of complaints against our sector compare with those of the banks and building societies. The contrast between the two sets of data would have made for a more complete and balanced story.
As IFA's, we know we do vastly better than the banks on just about any parameter you care to name, so there's no need for any of us to jump up and down about it. For a start, the FSA takes not a blind bit of notice.
17:44 on 22 February 2012
I definitely must get hold of those figures because it is not clear from the above whether the complaints arising from the fine where the cause of the rise, or whether the fact of the fine cause other clients to complain, and these are a further increase.
The latter explanation would not surprise me as notification of FSA investigations tends to precede rather than follow an increase in complaints. It could be that the FSA have found an effective way to drum up business.
20:06 on 22 February 2012
The next train arriving at 1 Churchill Place is the AIG Premier Access Bond express, recently departed from Coutts and calling at HSBC, UBS, Credit Suisse etc etc
11:48 on 23 February 2012
@ Reg
Lets just hope (for customers sake) it will be delivered by the Post Office, if it is like our recent mail delivery, they may never get it!
12:03 on 23 February 2012
Looking at complaints data on investment complaints:
1st Norwich and Peterborough... 351 complaints
2nd Barclays...257 complaints
3rd our most RDR compliant firm Towry EJ with 135
4th Santander ..........124 complaints.
No-one else had over 100.
The big issue is, Towry call themselves IFAs, and this does not make IFA figures look good!
12:16 on 23 February 2012
By extrapolation, Towry accounted for over 25% of all IFA complaints on investment to the FOS.
Looks like their Fisherman has caught a monster catch!
12:33 on 23 February 2012
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