RegulationJul 2 2015

Fos rules it was ‘reasonable’ to stop looking after finances

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Fos rules it was ‘reasonable’ to stop looking after finances

Fos has dismissed a complaint that Mattioli Woods caused financial loss after it stopped looking after a couple’s finances without telling them.

The couple – known as Mr G and Mrs H – became clients of the Leicestershire-based company in 2004.

In 2006 they wrote to Mattioli Woods complaining about the commission it had received from a transaction. Following an exchange in correspondence, in September that year, the couple said they wanted “nothing more to do with the business”.

In early 2014 the couple were informed Mattioli Woods was no longer acting as their fund managers and that trail commission had been paid to it up until February 2014.

The couple then raised concerns about Mattioli Woods no longer acting on their behalf.

Ombudsman Terry Connor said: “The contents of Mr G’s letter in September 2006 speaks for itself. Mr H made clear that both he and his wife no longer wished Mattioli Woods to provide them with further services and that legal action would be pursued in furtherance of their complaint.

“In this context, I am persuaded that it was reasonable for Mattioli to cease looking after their affairs.

“I do not consider that Mattioli Woods ought to have confirmed that it would no longer act for either Mr G or Mrs H because the instruction had come from Mr G.”

Mattioli Woods offered to refund trail commission amounting to £1,069.88 – £491.94 to Mr G and £577.94 to Mrs H – before the case went to Fos but the couple were dissatisfied with the offer.

However, Mr Connor said this offer was fair and reasonable.

He added that he was satisfied by the evidence that Mattioli Woods had made the couple aware of the commission involved in the 2006 transaction.

Mr Connor said: “If they did not understand the information relating to the payment of initial commission provided, it was incumbent on them to ask the adviser to explain it.

“I therefore do not consider it reasonable that Mattioli Woods ought to refund the initial commission.”

Right to reply

A spokesman for Mattioli Woods said: “It is always disappointing when a relationship breaks down with a client and we are fortunate that this is a rare occurrence for us.

“The cases referred to relate to a couple from 2006, before RDR and the Financial Ombudsman Service ruled in favour of Mattioli Woods, and further agreed with the way we sought to conclude the matter.

“We pride ourselves on our client handling, and have long-standing client relationships spanning back decades to when the business was first started, and our complaint levels remain very low.”

damian.fantato@ft.com