Positive Solutions has been told to repay a client who complained after he did not hear from his adviser for more than a year.
A ruling by the Financial Ombudsman Service found that when the client – known only as Mr N – sought advice from Positive Solutions in April 2013, he had agreed to pay a single amount of £465 for an adviser to carry out research, understand his needs and act between him and a provider.
There was nothing in the agreement that said Positive Solutions would provide an ongoing service, but trail commission was not stopped once this sum had been paid and Mr N continued to pay for advice he was not getting.
At this point, Mr N complained that he was paying for a service he was not receiving and repeatedly pursued the adviser for annual review appointments, and argued promises of keeping in touch never materialised.
Ombudsman Doug Mansell said: “It was clear from the outset that the complaint concerned the payment of commission. While this may have been during the initial payment period, I think Positive Solutions should have taken more care in ensuring that it only received the correct sum.”
Mr Mansell ruled that Positive Solutions should repay the overpaid commission plus 8 per cent interest and £150 for the trouble and upset caused – although the company had already agreed to do this when Mr N first raised his complaint with the ombudsman.
Despite this, he did not find against Positive Solutions for its adviser’s failure to provide Mr N with an ongoing service.
Mr Mansell said: “I’ve not seen evidence of any contractual obligation for the adviser to give ongoing advice.
“I accept that there may have been an informal agreement along these lines. But it was also open to Mr N to contact the adviser if he wanted a review of his investment. I’m not able to comment on any problems he may have experienced in doing so.”
He also found that Positive Solutions put Mr N in touch with a new adviser “promptly” when he was unable to contact his first one because that adviser had left the company.
A spokesperson for Positive Solutions said: “We take our responsibilities to customers extremely seriously and aim to achieve the best possible outcome for all of our customers.
“In this instance, an adviser charge agreed with the customer was scheduled to be paid through the product over a 12-month period.
“An error on behalf of the product provider meant that these payments continued beyond the 12-month period.
“The customer has been compensated in full, and a £150 payment has been made in recognition of the inconvenience caused.”