With regard to the case involving the Financial Ombudsman Service (Fos) and St James’s Place (SJP) over the sale of a pensions mortgage, I have now read and digested this case and I would agree with Fos.
First, when Mr D asked for his premiums to reduce, SJP gave no risk warnings and simply executed his instruction. As advisers, we are expected to advise on such matters. If that had been my client I would have sent a strongly worded letter to him making it abundantly clear that if he did this he would not pay off his mortgage.
However, this is irrelevant. SJP had accepted liability for the advice given, and the complaint was over the settlement offered. Its offer was very poor and not calculated in line with guidance.
The ombudsman did not comment on the suitability of the initial recommendation. SJP had already agreed it could not prove it to be suitable, and had simply made a poor offer. The ombudsman then laid out the correct method for calculating fair compensation. This is not about the advice, but the offer.
I am also really unsettled by the level of vitriol here for the client. They come to us for advice as they do not know what they are doing and trust us implicitly. We all know that there are some clients that need their hands held every step of the way.
Daniel Elkington
IFA,
Chattertons,
Boston,
Lincolnshire
