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Financial Advisers - What to do if you receive a complaint

Having spent many years as in-house counsel for financial services companies, we are all too familiar with complaints against advisers and how distressing they can be for the adviser and his or her practice. 

The first thing to understand is that, if you have been an adviser for long enough, it is almost inevitable that you will receive a complaint at some stage. 

If you are with a large financial services licensee then they should have a complaints procedure for you to follow if you receive the complaint. This article is more some practical tips for advisers rather than a guide to how to fully deal with a complaint. 

One issues we have encountered often with advisers is them taking the complaint personally. They often saw the complaint as an insult to their abilities. It is often extremely difficult to divorce these personal feelings from the complaint process. 

The above being said, it is important that you come to terms with the complaint and try and think of it on a commercial basis. Complaints can be extremely time consuming for your practice and have real financial costs in terms of impacting your ability to operate in the business.

It is also important you work with your licensee's complaints department to ensure the complaint is resolved appropriately. Often advisers will be lax to respond to requests from a complaints department and this will unnecessarily drag a complaint out and antagonise the complainant. Further, if the complaint is not resolved by the licensee and is referred to an Ombudsman service it also puts you on the back foot in that forum.

The next thing to clear up is your licensee's professional indemnity and contribution policy. Licensees will often require some form of contribution from an adviser and it is important you are aware of this from the outset. 

Another tip is to make sure you collate your file so that it is easy to follow and clearly shows the advice and processes you followed. A well constructed and thorough file is important in defending any complaint. Make sure this does not just include your advice documents but any file notes and emails as well.

Finally, make sure you reflect on the complaint and use it as an opportunity to improve your practice. Even if the advice does not warrant a complaint, the complaint itself may be an indicator that you should improve your client communication processes. 

By all means the above should not be seen as a comprehensive guide, just some hints picked up over the years. 

It is also often helpful to obtain some independent advice when you are dealing with a complaint as your interests and the licensee's interests are not necessarily always aligned. 

Liam Young