Service complaints will have to be dealt with within eight weeks by financial advisors under new rules published by the Financial Services Authority (FSA) and the Financial Ombudsman Service (FOS).
The new complaint handling rules require all firms to aim to resolve complaints within two months and notify complainants of their right to contact the FOS if dissatisfied.
The rules will come into effect when the Financial Services and Markets Act is activated. The act was passed in October but is unlikely to come into force until 2002.
They also cover who may refer a complaint to the FOS and which firms' activities come within its jurisdiction.
FSA consumer relations director Christine Farnish said the rules came after extensive consultation and drafts published earlier this year. There have been amendments added for clarification and more guidance included.
Farnish said: “These rules are a key element of the regulatory framework to protect financial services consumers. They'll enable retail customers to get their problems dealt with quickly and effectively. Standards of complaint handling by retail firms should improve. Where problems persist and consumers remain dissatisfied with the way a firm has dealt with their complaint, the independent FOS will be available.”
Chief ombudsman Walter Merricks said the service was already functioning as the central contact point for consumers with unresolved complaints about financial firms.
“The publication today of the single set of rules brings us a step closer to finalising the formal framework under which we shall be authorised to work when the new Financial Services and Markets Act is brought into force.”
The other rules are that firms must have effective internal complaint handling procedures in place and that customers must be made aware of these procedures; that the firms must report information about their complaints handling to the FSA twice yearly; that all authorised firms are covered by the FSA on a compulsory basis; that access to the service is open to individuals and firms with an annual turnover of less than £1m; that the ombudsman can make a maximum money award of £100,000 and that the ombudsman can dismiss frivolous or vexatious cases.