Wednesday, 19 July 2006
The Year of the Exploding Pie Charts - the Financial Ombudsman Service Annual Report
Walter always liked a well-designed report as became clear when the austere Insurance Ombudsman Annual Report was transformed after his arrival there. The FSO reports continued this tradition and this year his communications team have done him proud. Perhaps rather too proud - the pie chart on page 17 shoots out statistics like some terrible nail bomb.
Some of the statistics are indeed very striking. 25% of their complainants are readers of the Daily Mail and/or the Mail on Sunday. Middle England throws aside the paper and turns to their trusty word-processor to churn out yet another letter to the Ombudsman about their dreadful mortgage endowment deal. No other paper comes close - why is this? I once researched those attending a Daily Mail Books Page lunch and their loyalty and trust in the paper and the opinions of the late Linda Lee Potter (still with us at the time of the lunch signing books for long queues of fans) came through very strongly - were Ombudsmen one of her enthusiasms?
The other stats show that at last we seem to be coming if not to the end of the mortgage endowment mis-selling, at least the beginning of the end.
As Sir Christopher Kelly the Chairman wrote in his introduction "there is life beyond mortgage endowments. And some interesting trends are emerging in other areas, which could be a useful indicator of what the complaints world might look like after the endowment deluge". He notes that insurance is up by a quarter and banking-related cases by a third. I wonder if they showed him that data in a pie-chart.
What I was looking for was some way to draw a few conclusions. I need normalisation perhaps against sales or transactions and some profiling so that we can understand more about the markets and the organisations that the complaints emerge from. Pages 50 and 51 show big pie chart (blue) surrounded by moons (purple) connected by dotted flight paths, showing that 14% of complaints came from IFAs (independent financial advisers), 26% from banks and 45% from life insurance and investment product advisers. What does this mean?
If Ombudsmen want to improve markets then they must target the serial offenders or at least show the sort of behaviours that make for persistent poor complaint management or product or service quality. The report claims "our work gives us a unique insight into how complaints arise and how they might be prevented from arising in the first place". I believe that is true but the report does not give us the fruits of that insight.
In fact it was the least flashy part of the report that gave in very few words a good insight into a particular and new concern. Michael Barnes CBE the independent reviewer eschewed pie charts in favour of plain prose to point out issues about redress calculations by firms - picked up by the Chairman and to be discussed with the FSA. Loved it Michael!
Walter Merrick's own interests now seem to be focused on a higher plane - on the OmbudsUniverse still expanding at a rate approaching the speed of light. I think a move to Brussels is in order to show how it is done. Now there's a pie that would challenge even Desperate Dan at his hungriest.