Investor profile flaws remain leading cause of financial disputes in Italy
Italy’s arbitrator for financial disputes Arbitro per le Controversie Finanziarie (ACF), the ombudsman looking into affairs opposing Italian savers to financial intermediaries, has received 903 complaints in the first half of 2021 (vs. 874 in H1’20).
Of those complaints, 65% have been examined and led ACF to award €13.5m in compensation to Italian savers in the first six months of the year (vs. €12m in H1’20), taking to €97.8m the total amount paid to Italian savers since ACF’s establishment in 2017 with an average compensation of around €40,000.
ACF said compensation claims reached around €47m in H1’20 with an average claim of €50,000 and numbered over 200 requests for compensation exceeding €50,000 in claims. Some 71 financial intermediaries were involved in ACF's proceedings in the first six months of 2021.
“The area with the greatest critical issues in relations between retail investors and intermediaries keeps relating to the preliminary information required for the investment. Too often, the savers who turn to the ACF, in addition to not recognising themselves in their investor profile as outlined in the specific MiFID questionnaire, complain that they have not received clear and adequate information on which to base informed investment choices.
“This is a problem that the ACF College is almost systematically facing and on which numerous and consolidated guidelines of a general nature have now been defined in the almost 4,000 decisions published so far,” the ombudsman commented.
ACF said it will publish a review of judicial decisions among those its board took so far on its website in July. Moreover, it plans to publish a guide for retail investors in H2’20 in a bid to help them identify good and bad investment practices. “The goal is to generate information and behavioural awareness of small savers, who too often rely indiscriminately and tend to lose responsibility, only to regret the outcome of the investments made,” the ombudsman said.