Financial adviser complaints can be avoided, says Insurance & Savings Ombudsman
Insurance & Savings Ombudsman Karen Stevens says good client communication and clear processes can help financial advisers prevent
client dissatisfaction.
“We deal with over 3000 complaint enquiries each year and only a small number relate to financial advisers,” says
Insurance & Savings Ombudsman Karen Stevens. “Mostly, we are contacted about insurance issues including house, motor vehicle,
contents, life or health insurance.
“But the complaint enquiries we do receive about financial advisers tend to be about the quality of advice,
miscommunication, misunderstandings, fees and charges.
“The good thing is many of these issues can be avoided if financial advisers have robust processes, check details, and
communicate clearly and regularly with their clients,” says Karen.
“In one case, an adviser didn’t inform his client’s insurance company that his client hadn’t been smoking for 12 years.
Therefore his life insurance premiums were higher than they should have been. The client mistakenly thought it was his
adviser’s responsibility to inform his insurer of the change in his smoking. This highlights how important it is for
advisers to describe their role and regularly communicate with clients. It also demonstrates how many clients do not
understand what their obligations and responsibilities are.
“Another adviser filled out a health insurance application on behalf of her client, and omitted to declare details about
their ongoing health issues. When the insurance claim was declined due to non-disclosure, the client said it was his
adviser’s mistake.
“It’s wise for financial advisers to ensure their customers complete application forms, and to make sure their clients
are fully aware of the duty of disclosure and the potential consequences of failing to disclose information.”
Complaints are valuable feedback for industry. “Rob Everett, Chief Executive of the FMA, recently described complaint
data as ‘gold-dust’. We agree. We regularly share complaint information with our members through regular newsletters and
training webinars,” says Karen.
“We base our training on real complaints and issues. We want to ensure lessons can be learnt from past mistakes, and
business practices can be improved, so everyone benefits.”
ends