Ongoing Advice Fee Claim Success for
Cowgills Wealth Client

If you are unsuccessful in bringing a complaint to your financial adviser or wealth management company, you may be able to ask the Financial Ombudsman Service (FOS) for an independent review.

Parliament set up FOS in 2001 to consider disputes between financial institutions, like financial planners, and their customers, awarding compensation where appropriate following its investigation.

While it is possible to take a case to FOS yourself, many people choose to instruct a legal specialist, such as TLW Solicitors. The process can be complex, with legal and financial jargon to navigate and may take several months to resolve.

A recent FOS decision highlights the issue of ongoing advice fees on a pension investment.

Mr T complained that Cowgills Wealth Ltd failed to provide him with his annual pension review in 2021 and 2022, which resulted in his pension underperforming and his losing money.

In early 2020, on the advice of his Cowgills adviser, Mr T transferred a pension worth around £340,000 from one provider to another. Mr T was deemed a Low Medium Risk investor and was recommended to invest in cash and four other funds. An initial advice fee of £3,500 and an annual fee of 0.50% of the value of his funds were agreed. Mr T received correspondence to say that he and his adviser would meet “at least annually” to consider the pension’s performance and any changes to Mr T’s circumstances and tax position.

The first review Mr T received was in September 2022, during which he expressed his concerns about not having had reviews in early 2021 or early 2022. Cowgills acknowledged his complaint and offered to refund the ongoing fees he was charged between March 2020 and October 2022, totalling £3759.59 and an additional sum of £240.41 for the ‘distress and inconvenience caused’.

Mr T did not accept the offer, saying that the lack of ongoing reviews meant no changes had been made to the funds he was invested in, and his overall pension portfolio had not performed as well as it could have. Mr T also wanted Cowgills to refund all the fees he had paid to date, including the initial advice fee.

Cowgills argued against this, reiterating their refund offer was fair. They also said that it was unlikely the adviser would have changed any of Mr T’s invested funds before September 2022, as the Cowgills committee only decided to make changes in October of that year.

As no decision could be reached between them, Mr T asked the Financial Ombudsman Service to investigate what he considered was ‘Cowgills’ complete lack of management’.

Mr T’s complaint centred around the fact that his fund underperformed compared to industry benchmarks. Had he had the opportunity to review the funds he had invested in, changes could have been made, and the performance would have been better.

However, FOS decided that the main issue was Cowgills’ lack of ongoing advice, and the fees Mr T had paid for it.

The Ombudsman concluded that Mr T should be ‘fairly compensated’ and required Cowgills to compare the performance of Mr T’s pension with what it would have been worth had none of the ongoing fees been deducted between March 2020 and January 2023. If the calculated value was greater than the actual value, Cowgills should pay the difference. Mr T would also receive £240.41 for the distress and inconvenience caused.

If you think you may have been paying ongoing pension fees for services you have not received, e.g. annual reviews or portfolio updates, please speak to TLW Solicitors’ experienced financial mis-selling team. As well as a refund for overcharged fees, you may be entitled to the loss of growth on the funds and interest.

We work on a ‘no win – no fee’ basis and can help you through the compensation process, whether this is settled in the early stages directly with your financial adviser or through FOS.

Our experienced team has extensive experience successfully taking cases to FOS and securing client compensation, even if they have been knocked back previously. We also understand the appeals process.

Sarah Spruce, Legal Director at TLW Solicitors, says:

“If you pay for a service, you expect to receive it. However, many people haven’t received what they have been promised or don’t even realise they are paying for ongoing reviews. The FCA is monitoring firms closely, and there may be more changes to how the advice industry operates. The FCA’s new ‘Consumer Duty’ puts customers’ needs first and foremost, and the financial industry must change how it operates and communicates with consumers.

“It is also important to remember that as well as being entitled to a refund of any fees for reviews that weren’t carried out, it is also possible to claim for the loss of growth on the fund as a result of there being no review, together with interest. If you are unsure about yours or a loved one’s investments or pensions where ongoing advice appears not to have been provided by an Independent Financial Adviser (IFA), Financial Planner or Wealth Manager, then get in touch with my team and we can investigate whether you may be eligible to make a ‘no-win, no-fee’ refund claim.”