St James's Place Wealth Management Plc · DRN-6252380

The complaint Mr M has complained that St James’s Place Wealth Management Plc (“SJP”) did not provide annual reviews for his Individual Savings Account (“ISA”) and SJP Retirement Account (“RA”) that he has paid for. He is also unhappy that SJP kept taking the annual fees but did not make any changes when the investment was dropping in value. What happened Mr M met with SJP along with his wife in 2008. They both made some investments following this meeting. Mrs M’s complaint is being dealt with in a separate complaint. Around November 2008, Mr M invested into an ISA with SJP. As part of the process a fact find was completed which confirmed the following information: • Mr M was aged 47 and married. • He was employed as an Associate Director and earned £45,000 per annum. • He had a disposable income of £1,500 each month. • He had £7,900 invested in an ISA and £26,000 held jointly on deposit. • He had a medium attitude to risk. • He liked the SJP way of investing. A suitability report dated 5 November 2008 was provided and confirmed the information in the fact find and recommended Mr M start a regular premium ISA of £100 per month and invest into the UK High Income Trust. In a suitability report dated 9 March 2012, it can be seen that Mr M was advised to transfer his occupational pension and a personal pension with a different provider into a personal pension plan with SJP. The funds were invested into the Adventurous Growth Portfolio in line with a medium to high attitude to risk which it was now established that Mr M had. In 2017, Mr M was then advised to invest a further £3,000 into his ISA and this was confirmed in a suitability report dated 5 May 2017. He was advised to invest 30% into Global Equity, 20% into UK High Income and 40% into Worldwide Opportunities, in line with his medium attitude to risk. He was also recommended to invest £10,000 into his pension and invest into the Managed Funds portfolio in line with his attitude to risk. In a suitability report dated 10 August 2018, Mr M was recommended to make a further regular contribution of £100 into his ISA. It confirmed that he was happy with the UK High Income fund but wanted a more global approach, so the Worldwide Opportunities fund was recommended. A review took place in 2021 and this was confirmed in a suitability report dated 9 March 2021. At this stage a switch of funds was recommended where 10% was to be invested into the Asia Pacific, Emerging Markets, North America, Global Managed, Global Quality, Global Equity, International Equity, UK & International Income, UK & General Progressive and UK Growth funds.

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A further review was confirmed in a suitability report dated 23 August 2022, where no changes were recommended. From the relevant date after the implementation of the Retail Distribution review (“RDR”) on 31 December 2012 (explained in more detail below) Mr M was paying an Ongoing Adviser Charge (“OAC”) of 0.5% on his ISA and 0.25% on his RA. Mr M transferred his ISA away from SJP on 17 November 2022 and the RA was transferred on 14 August 2023. On 22 July 2024, Mr M complained to SJP but this does not appear to have been received until 18 February 2025. He said that he had not received all of the reviews that he had paid for and SJP continued to take fees and did not act when his investments were falling in value. SJP upheld Mr M ’s complaint in a letter dated 3 April 2025, accepting that it had missed some of the reviews of his investments for some of the years. It offered a refund for missed reviews in 2019 and 2020 for both the investments and a refund for the missed review of the RA in 2023, along with a further £150 for distress and inconvenience. Mr M was unhappy with this offer and so brought his complaint to the Financial Ombudsman Service on 4 April 2025 where it was assessed by one of our investigators. He agreed with the offer SJP made to refund the missed reviews of 2019 and 2020 but he also found that the review of Mr M’s RA didn’t take place in 2018 and so felt that SJP should also include the refund for this in its offer. SJP responded to the assessment by raising a time bar objection under the Dispute Resolution Rules (DISP) as set out in the Financial Conduct Authority’s (“FCA”) Handbook (explained in more detail below). SJP said that in Mr M’s case his plans became chargeable for separate OACs in May 2017 and so the first annual review should have been due on or around May 2018. Under the DISP Rules Mr M had six years to complain about the missed review from this time but as he raised his complaint in February 2025, more than six years later, he has complained about the 2018 review too late. SJP also said that it was satisfied from the documentation that was provided to Mr M in 2017, when he added to his investments, that he would have known, or reasonably ought to have known, that annual reviews would be taking place. So he had three years from the missed review in 2018 to make his complaint, which he didn’t do until around seven years later. So the complaint about the missed 2018 review has been brought out of time and cannot be considered by this Service. The investigator then looked into the time bar SJP raised and agreed that the complaint about the 2018 review had been brought outside of the required timescale. He therefore amended his assessment to explain this and to confirm that he agreed with the offer that SJP had made in its final response letter. Mr M didn’t agree with the investigator’s findings. He explained that the refund offered was too low and he didn’t think that SJP had offered the correct level of refund based on the OACs of 0.5% for both of his investments. He also didn’t agree that the OACs from 2018 couldn’t be considered. The investigator wasn’t persuaded to change his outcome. So as no agreement could be reached the complaint has been passed to me to decide.

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What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. I’ve taken into account relevant: law and regulations; regulatory rules; guidance and standards; codes of practice; and (where appropriate) what I consider to have been good industry practice at the relevant time. Where the evidence is incomplete or inconclusive I’ve reached my decision based on the balance of probabilities – in other words, on what I think is more likely than not to have happened given the available evidence and wider circumstances. The focus of this decision is the method of calculating the redress. However, I must first consider which dates of the reviews fall into the scope of this Service. Mr M’s ISA started on 24 November 2008 and was transferred away from SJP on 17 November 2022. His RA started on 29 November 2012 and was transferred away on 14 August 2023. The start date of the investments is important because before 31 December 2012 Mr M’s investments didn’t attract any ongoing review charges and while an ongoing fee may have been taken, this was effectively deferred commission and there was no obligation for an adviser to provide any ongoing service in order to be able to receive this. However on 31 December 2012 the rules governing how advisers are paid changed across the industry. This was known as the RDR, as mentioned earlier in this decision. The changes meant that when a review service was to be provided a separate charge known as an OAC should be agreed and deducted from the plan and could be turned off should advice no longer be required. This charge couldn’t be applied retrospectively and would only apply to investments that pre- dated the introduction of the RDR upon a “triggering” event which, in the case of Mr M, happened in May 2017 when he added to his ISA and RA. So this meant that the annual advice reviews should have started on or around twelve months after that point - May 2018. Its important to note that the reviews didn’t necessarily have to take place in May and could have taken place within a reasonable time period. So Mr M only started paying OACs from May 2017 and this is the point when SJPs obligations to Mr M to annually review his investments began. However, a further element in this complaint is that, as mentioned above, SJP has objected to this Service considering the merits of the complaint about the 2018 review because it feels, under the DISP Rules, it has been brought to this Service too late. So this is my next consideration. The Financial Ombudsman Service isn’t free to consider every complaint that’s brought to us. We are governed by rules set by the FCA’s Handbook, the DISP Rules as mentioned above. They set out the complaints that we can (and can’t) consider and I have to strictly apply these rules. The specific DISP rule relevant for this complaint is DISP 2.8.2 R which sets out the following:

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“The Ombudsman cannot consider a complaint if the complainant refers it to the Financial Ombudsman Service: (2) More than: (a) Six years after the event complained of; or (if later) (b) Three years from the date on which the complainant became aware (or ought reasonably to have become aware) that he had cause for complaint; Unless the complainant referred the complaint to the respondent or to the Ombudsman within that period and had written acknowledgement or some other record of the complaint being received; Unless: (3) in the view of the ombudsman, the failure to comply with the time limits in DISP 2.8.2 R or DISP 2.8.7 R was as a result of exceptional circumstances; ……. The rules don’t say that Mr M needs to know exactly what’s gone wrong to bring a complaint – only that he needs to have a reasonable awareness something might have gone wrong. If a complaint is brought outside of the time limits set out in the rules, we’d only be able to consider it if SJP has consented – which it hasn’t – or if the complaint was brought late due to exceptional circumstances. The FCA gives an example of exceptional circumstances as being incapacitated. I haven’t been made aware of any such circumstance applying to Mr M. Each review is its own event so any review that should have taken place within six years before the date Mr M made his complaint automatically fall into the scope of this Service. Mr M’s complaint to SJP was received in February 2025 so that means the reviews from 2019, 2020, 2021, 2022 and 2023 can be investigated. For the review that took place, or should have taken place in 2018, this is more than six years before Mr M made his complaint. So, I must consider the second part of the rule which is whether Mr M knew, or ought reasonably should have known, he had cause for complaint more than three years before he raised it. To do this I have looked at the documents that were completed in 2017 when Mr M added to his ISA and RA to see if it was recorded that his plans should be reviewed annually. The suitability letter (dated 5 May 2017) and Key Facts document (dated 2 May 2017) given to Mr M when advice was provided in 2017 set out that he would be paying OACs. The suitability letter stated: Ongoing Advice A key element of financial planning is conducting regular reviews of your financial arrangements to ensure the course of action taken today remains appropriate…. The Key Facts document states: How much will the advice cost? We will also provide you with ongoing advice to review your investment and ensure it remains appropriate, as set out in the “Welcome to SJP” brochure provided by your Partner. The fee for this is 0.25% of your investment each year. It is paid for by deduction from the value of your investment and so will increase as your investment grows.

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I am therefore satisfied that from these documents Mr M should have been aware that he would be paying OACs from this date and why he was paying them. It therefore follows that when he didn’t have a review of his RA in 2018 (as we know the review was carried out for his ISA in 2018) he was, or reasonably ought to have known, he had a cause for complaint about the review being missed. Therefore, as the Rules quoted above set out he had three years from this point to make his complaint. But as he didn’t do so until 2025 the complaint about the missed review in 2018 has been brought outside of the required timescales so its merits cannot be considered. Merits Having looked at the paperwork provided that came about during Mr M’s relationship with SJP I have seen letters that shows reviews of the ISA and the RA were carried out in 2021 and 2022. So, the only missed reviews were 2019 and 2020 for both investments and then 2023 for the RA (as the ISA was transferred away from SJP in 2022 before a review was required). So, I agree with the offer that SJP has made to Mr M to refund any charges he paid for those missed reviews as well as the offer for the interest to be added. Mr M must be clear that the refund is for the reviews that SJP failed to deliver, that he had paid for because in respect of these SJP failed to meet its obligations. Therefore, it is only right that the charges paid for the service that didn’t take place are refunded. However, along with the OACs that Mr M was paying for there were also other charges that were a part of his contract with SJP – such as annual management charges, dealing costs, administrative charges and the charges for fund managers. These are distinct from the OACs and are charges which in my view SJP is entitled to retain because it met its obligations under these charges – it invested the funds as required, bought and sold units, managed the administrative side of the investments such as providing statements and market valuations. And while I know Mr M feels this wasn’t the case because he thinks he has lost money on his investments there is no correlation between this part of SJP’s obligations and the performance of the investments. I know Mr M has expressed his dissatisfaction with the level of the compensation however having clarified the calculations with SJP I am satisfied that the offered compensation has been calculated in line with the approach this Service normally uses in complaints such as this one. It is important for Mr M to note that the OAC for the ISA was 0.5% and for the RA the charge was 0.25%, as clearly set out in the illustrations for each of the investment products produced and provided to Mr M from the time. Furthermore, as the plans had commenced pre RDR and had become post RDR in 2017 the fees would not be applied to the whole fund value as some tranches would have been pre RDR and no OACs applied to them. So, this too may account for the level of the refund not being as high as he would like. And while I appreciate that he feels the illustrations for the ISA and RA are misleading on the point of whether the OACs were charged on the entire investment or just the top-up being made, I don’t agree they are. Having examined them I can see that the illustration for the ISA, for example, states that the cost of the ongoing advice review is “0.5% of your total investment”. Then if one continues to read the document it goes on to set out the effect of the charges based on the investment (top up/ contribution) that was actually being made at that time. The illustration for the RA replicates this.

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So, when the illustration is read as a whole, rather than sections of it being read in isolation, I am satisfied that this confirms that the OACs were being charged only on a proportion of the entire value of the ISA. Overall, therefore having looked at the charges that were paid for the ongoing advice service that applied to the investments made into the ISA and RA after the RDR came into effect I am satisfied that the calculations are correct. My final decision My final decision is that I don’t uphold this complaint. But I direct St James’s Place Wealth Management Plc to pay Mr M the compensation it has already offered in its letter of 3 April 2025 along with the interest payment and the further offer of £150 for the distress and inconvenience caused. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr M to accept or reject my decision before 22 April 2026. Ayshea Khan Ombudsman

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