Investments  

Adviser held to account for charging ongoing fees

Adviser held to account for charging ongoing fees

An advice firm has been ordered to pay £7,900 to a client after it failed to carry out pension reviews for which it had billed.

The Financial Ombudsman Service (Fos) found a client of True Potential Wealth Management, dubbed Mr J, was charged an annual fee for reviews of the investments held in his self-invested personal pension (Sipp), but the reviews were not carried out by the adviser.

The management of Mr J's Sipp was taken over by True Potential in 2013. From then on the firm charged for ongoing advice which it did not carry out, the ombudsman said.

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Mr J then complained to the firm in 2016, after which it offered to refund the fees he’d paid.

But Mr J did not agree with the investigator’s conclusions. He wanted to know what the fees would be worth if they'd remained invested in the Sipp.

Mr J also considered True Potential should pay compensation for the trouble and upset he’d experienced. 

And although True Potential offered to pay the refund of fees, investment loss, and compensation directly to Mr J, the client did not feel he was in a position to accept the offer, so it was passed on to the ombudsman for a final decision.

The ombudsman upheld the complaint and decided True Potential's offer of redress was reasonable.

In the judgement, the ombudsman wrote: "True Potential Wealth Management took over the management of Mr J’s SIPP in 2013. But he didn’t complain to the business about the lack of ongoing advice until 2016.

"I think that if Mr J had wanted his investments actively managed, he would’ve realised that this wasn’t happening sooner than he did.

"So from what I’ve seen, on balance I think it’s unlikely that Mr J wanted his investments to be actively managed. But True Potential charged him on the basis that they were. It’s therefore reasonable for True Potential to refund the fees that it charged in error."

The total sum involved is £7,900.02, including £250 paid as compensation for the client’s trouble.

True Potential was recently ordered to compensate a client after it failed to advise him of the options available to protect his pension pot from the taxman.

david.thorpe@ft.com