ESMA’s recent report on trends, risks and vulnerabilities (TRV) reveals that the total number of complaints reported across the EU was 7,026 in 1H16 compared to 5,152 in 2H15.
The three most common causes among complaints reported directly to national regulators in 1H16 were on:
- execution of orders (31%);
- quality/lack of information (19%); and
- unauthorised business (15%).
One clear trend was an increase in the proportion of complaints relating to bonds and other debt securities, to become the most complained-about instrument. Turning to complaints categorised by the financial instrument, the leading types of instrument generating complaints in 1H16 were:
- bonds and other debt securities (20%);
- shares, stock and equity (17%);
- options, futures and swaps (17%); and
- financial contracts for difference, or CFDs (15%).
Complaints relating to investment advice, in contrast, have fallen markedly over recent years, which may be associated with measures taken by NCAs and ESMA. Additionally, complaints collected via firms highlight that fees and charges are increasingly causing concern to retail investors, which is likely to be linked to their increased prominence in the current market environment of very low yields.