Profile Financial Solutions Client Awarded Compensation for Firm’s Failure to Fulfil Ongoing Service Obligations

Initially, a FOS investigator found that the complaint should not be upheld. Mr P was unhappy with the decision, so another investigator reviewed the evidence and concluded that the complaint should be upheld. The complaint was ultimately escalated to an Ombudsman for a final decision; FOS Ombudsman final decisions are binding if accepted by the complainant.

The complaint was upheld by the Ombudsman. Although Profile Investment Solutions fulfilled obligations set out in the Financial Conduct Authority’s (FCA) handbook, it failed to fulfil the terms of providing personal recommendations or related services under the FCA factsheet ‘ongoing adviser charges’. The FCA regulates financial services firms in the UK.

The Ombudsman’s investigation concluded that Profile Investment Services could have attempted to contact Mr P by telephone or post as he was not responding by email. The service provided by Profile Financial Solutions to Mr P only met expectations in 2019.

It was also noted that Mr P’s original risk profile was classed as ‘Medium to High’ but showed Mr P as unemployed at that time. The Ombudsman reported that Profile Investment Solutions should have recommended fixed-rate bonds due to the level of risk given Mr P’s financial situation at the time.

Due to the inconvenience Mr P was caused, Profile Financial Solutions had to pay him £100 plus compensation and any interest to Mr P if his pension had made a loss at the plan end date. This compensation is calculated based on the financial loss suffered by the client due to the firm’s negligence or failure to meet service obligations.

There have been a number of recent headlines relating to financial advisers and wealth management companies that have been ordered to refund clients after the Financial Ombudsman Service (FOS) found they have failed to provide ongoing advice and annual reviews for clients, despite charging fees for these services.

As part of the introduction of Consumer Duty by the FCA, firms now must show that they are regularly in contact with clients who are paying for ongoing fees. Notably, wealth management firm St James’s Place (SJP) recently earmarked £426 million to cover the cost of expected complaints relating to undisclosed client advice fees.

If you believe that you have been paying fees for annual reviews and ongoing advice from your wealth management firm or financial adviser, you may be eligible for compensation directly from your service provider or, if necessary, via a FOS investigation.

Sarah Spruce, Legal Director at TLW Solicitors and Head of the Professional Negligence team, commented:

Mr P’s case demonstrates the important reviews and advice financial firms must provide clients who have paid for them. If you have been paying fees for advice you have yet to receive, and are worried about your pension or investments, speak to a member of my team today. We can have a no-obligation discussion about your options and whether you may have the basis of a ‘no-win-no-fee’ refund claim.