The Financial Ombudsman Service upheld a client Mr P’s complaint about the firm's lack of effort to contact him about his annual fund review through alternative means of communication after he failed to respond to emails.
What happened with Mr P and Profile Financial Solutions?
In 2016, Mr P moved his pension benefits between two providers, Profile Financial Solutions and another provider. He received a Client Agreement and suitability report from Profile Investment Solutions, which outlined ongoing advice services and charges of 0.3% of the fund value. Mr P agreed to the terms and was happy to transfer.
The ongoing service agreement from Profile Investment Solutions included the following:
- Monthly monitoring of his funds
- A yearly review call to assess any changes in his circumstances or attitude to risk
- Yearly updates regarding his pension
- Ongoing support and correspondence as and when required
Profile Investment Solutions emailed Mr P in 2017 to arrange an annual review. Mr P did not reply, so Profile Investment Solutions emailed again in July 2018 and four times in 2019 to arrange a yearly review and continued to do so until 2022, but Mr P did not respond.
In 2022, Profile Investment Solutions contacted Mr P via telephone. Mr P discussed and confirmed with Profile Investment Solutions that he encashed his pension benefits and didn’t think anything was left in the fund.
Mr P then complained to Profile Investment Solutions about paying for the ongoing service but not receiving the annual reviews and asked to be compensated.
Profile Investment Solutions rejected Mr P’s complaint, arguing that they had contacted him to arrange an annual review on several occasions and that his funds had been monitored during that time.
Unhappy with Profile Investment Solutions’ response, Mr P took the complaint to the Financial Ombudsman Service (FOS) FOS is an independent, government backed body that settles complaints and disputes between consumers and financial services businesses. FOS can make important decisions that financial firms must follow.
Financial Ombudsman Service Investigation
+ −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.
Mr P’s Compensation
+ −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.
Ongoing Advice Fees Claims
+ −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.
Compensation for Ongoing 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.
TLW Solicitors’ View
+ −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.
TLW Solicitors Can Help
+ −If you are concerned that you or a loved one have been given unsuitable advice relating to your pension or investments or have paid for ongoing advice you have not received, contact the professional negligence team at TLW Solicitors for a no-obligation conversation about your claim. We can explore your options and see if you are eligible to make a ‘no-win, no-fee’ compensation claim.
You can call us on 0800 169 5925, email info@tlwsolicitors.co.uk, or use one of the contact forms below.
Time limits can apply, and so anyone wishing to bring a claim should do so without delay.
Minimum claim values apply.
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