Poor advice tops FOS investment disputes
Inappropriate advice in mixed asset funds, managed investment, and other investments and advice were the most common issues in investment and advice disputes received by the Financial Ombudsman Service (FOS).
The 2015/16 annual review showed that out of the 1,141 investments and advice dispute cases FOS received, 28 per cent of them were about inappropriate advice, while almost two-thirds were about managed investments and superannuation.
FOS found mixed asset funds (investing in multiple asset classes such as cash, bonds, shares, and property) continued to be the most common managed investment product about which people submitted complaints. Inappropriate advice was the main issue within these products.
FOS received 250 disputes related to mixed asset funds, which made up 59 per cent.
Inappropriate advice made up more than half (58 per cent) of the issues in managed investment disputes, followed by failure to follow instructions (10 per cent).
"Many investors complained that the advice they received was not suitable for their goals, objectives or risk tolerance, or that risks were not always adequately disclosed or explained," the report said.
More than half (55 per cent) of managed investment disputes involved a financial adviser or planner, while 18 per cent involved a managed investment scheme operator or fund manager.
Figures by product category showed managed investment disputes topped the list, with 427 disputes (37 per cent), followed by superannuation at 324 disputes (28 per cent), and securities at 204 disputes (18 per cent).
Overall, the number of investments and advice disputes received by product line fell by nine per cent, while the proportion of disputes was also down one percentage point to four per cent of overall disputes received. Investments and advice disputes made up five per cent of all disputes.
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