An adviser has been ordered to pay £4,250 back to a disgruntled client for failing to fully explain what service ongoing charges entitled him to.
The Financial Ombudsman Service has ordered Geraint W Williams to refund his client, who is referred to as Mr W, after he complained that he was not told of the charges he would pay on his pension plan.
The gripe began in late 2013 when a client, referred to as Mr W, and his business partner had discussions with Mr Williams about their pension plans.
Mr Williams recommended the plans be moved to another provider.
Mr W claimed that although he was aware that there would be an initial charge, he was unaware of any ongoing charges.
But the Financial Ombudsman Service found Mr Williams had given Mr W information about both the initial and ongoing charges.
But the ombudsman identified there was some confusion about the level of service that would be provided as a result of Mr W paying the ongoing charges.
Mr Williams explained that the charges would have provided Mr W with an unlimited number of visits and unlimited access to Mr Williams by mobile – including at the weekends.
Mr Williams also said he offered online servicing through the insurer’s website, which included a pension review service, at retirement tool, income planning tools, drawdown governance service and risk profiling.
However, Mr W did not make use of these services as a result of the confusion in the terminology used.
The ombudsman found the term 'external investment charge' was used rather than 'ongoing advice charge', which meant that while Mr W was told about the fees he was not aware what he was paying that amount for.
In a final decision, ombudsman Ivor Graham said: “I uphold this complaint and I direct Geraint W Williams to recompense Mr W.
"I would be surprised if Mr Williams would have tried to hide his charges when he would have been aware that the pension provider includes them in its policy documentation.
“I am satisfied that Mr Williams gave Mr W information about both the initial and ongoing charges. Furthermore, I have seen nothing to support the view that the advice was unsuitable.
“However, the investigator identified that there was some confusion on the level of service which would be provided as a result of Mr W paying the ongoing charges. It seems Mr W didn’t make use of these services and that may have been as a result of the confusion in the terminology used e.g. 'external investment charge' rather than ongoing advice charge.
“So, while I don’t believe Mr W wasn’t told about the charges I don’t think he was necessarily aware of what these were for.”
aamina.zafar@ft.com
