Brokers, prepare for more complaints

Brokers boast about never receiving complaints, but the FOS\' latest review shows they are rising. So it\'s best to prepare for the worst and record everything from now on, says Rob Griffiths

I don’t know where the phrase ‘I wish I had a pound for every time I heard someone say…’ originates, but it’s a shorthand way of telling people they’re boring and you wish they’d stop droning on about something you’ve heard before.

So on this occasion, I won’t say that I wish I had a pound for every time I’ve heard brokers tell me that they’ve never received a complaint.

After all, this is a good thing and it proves that brokers are seen as low risk by the Financial Ombudsman Service.

But problems arise if you attempt to point out to the aforementioned broker that this might not always be the case. Their unblemished complaints return is unlikely to last forever.

Indeed, it is usually the case that following the statutory regulation of a sector, the number of complaints those working in the sector receive increases. So it has proved in our industry.

Last month, the FOS published its annual review for 2006/07, the second full year it has been handling the mortgage market.

And there has been a rise in complaints regarding mortgage products in general and brokers in particular.

The FOS review shows that there was an 11% increase in the number of mortgage complaints, with 1.5% of them made against brokers.

Many of them refer to a lack of adequate explanation regarding the fees associated with arranging and setting up mortgages.

So the FOS is trying to determine whether these fees were properly explained to customers at the outset.

The other main area covered by the FOS relating to brokers also involves inadequate explanations, this time concerning the features of mortgage products themselves. Many complainants suggested that clauses weren’t adequately explained by brokers. The FOS thinks this is a result of the increasing complexity of residential products.

Brokers can help themselves prepare for the bad news by ensuring their record-keeping is up to scratch. They have to show documentation that proves clients have understood both the fees and the products they recommend.

It may be that firms in-creasingly have to look at recording client interviews,both on the telephone and face-to-face.

By doing so, they can ensure they are able to prove that customers were in full possession of the facts should they complain further down the line.

Now is not the time for brokers to sit back and assume that the status quo of a no complaints business will always be the case.

The point of having an om-budsman is that individuals can appeal to an independent body, have their grievances heard and then ruled upon.

This makes consumers more likely to speak up so brokers are bound to get more flak.

So not only should brokers handle every complaint correctly and diligently, they should also ensure that the lessons learnt are fed back to their firms.

And if firms’ processes are found to be the cause of client dissatisfaction, they should adapt those processes to prevent that type of complaint being made again.

The Treating Customers Fairly initiative demands that this type of feedback action is adopted to ensure better service for clients.

Complaints against brokers may never hit the levels aimed at independent financial advisers, but they are rising nevertheless. Firms must be aware of this and prepare accordingly.

Long may the ‘I have never received a complaint’ brigade continue to voice this positive, but this shouldn’t stop them preparing for the inevitable.

Egg on Brown’s face is better than a HIP millstone around his neck
Shambles, disgrace, farcical – words that could be used to describe not only this column and communities secretary Ruth Kelly’s haircut, but also the government’s decision to delay the implementation of Home Information Packs to August 1.

They will now be phased in, initially for four-bedroom houses only. Have the sarcastic roars of the Opposition parties ever cut so deep as when Kelly was attempting to make this announcement to Parliament a couple of weeks ago?

Without wishing to add too much to the vast number of column inches already devoted to the decision, one has to wonder what the Prime Minister-in-waiting Gordon Brown makes of the fiasco.

The chaotic way in which the Department of Communities and Local Government has attempted to implement the packs, allied to my naturally pessimistic nature, leads me to believe that we could see Brown scrap the whole shebang when he finally sits in the big chair.

Regardless of the millions of pounds of public money already spent on HIPs – and not forgetting the investments made by hundreds of companies and thousands of individuals – the temptation must be for Brown to rid himself of this millstone around the government’s neck.

After all, there are precedents. Who could forget self-invested personal pensions and pension term assurance? Brown may well think that egg on the government’s face in the short term is a price worth paying for the long-term political advantages of getting HIPs out of the way.

Whitehall, particularly Kelly and housing minister Yvette Cooper, argues that this will never happen. But if Gordon decrees it, HIPs will disappear.


We’re running out of HIP puns
With all the comedic timing of Boris Johnson, I bring you: Is it just me or have we run out of puns containing the acronym HIPs? Would the last person to write the headline ‘HIP replacement’ please turn out the lights.