The ombudsman has ordered a firm to write off the fees it charged a client after she told the firm she no longer wanted them to advise her.
The Financial Ombudsman Service (Fos) ruled Pantheon Financial Management could not charge its client Mrs G for services carried out after she had informed it she was terminating their relationship.
The ombudsman found Pantheon had in fact never carried out actual services for the client, such as an annual portfolio review, and as such could not invoice her for such services.
Mrs G had called the adviser in August 2015 to terminate her ongoing relationship with the firm after her adviser had left to join another firm.
At the same time she followed her adviser to his new firm.
It was not until January 2016 that Pantheon asked her to confirm this in writing.
The woman later received an invoice from the advice firm for the period leading up to the January email.
Mrs G complained to the Fos after Pantheon had dismissed her direct complaint and instructed a collection agency to recover the outstanding sum.
Ombudsman Alessandro Pulzone admitted there were gaps in the evidence but said he found Mrs G’s account of what had happened “persuasive and consistent”.
He also pointed to a review which supposedly had been discussed for the autumn but was never carried out as further evidence that the firm had been duly notified of the client’s leaving.
Pantheon said there was no evidence that Mrs G had called in August to terminate the agreement.
It also disputed the Fos’ jurisdiction to consider the woman’s complaint on the basis that the activities the invoice related to weren’t regulated activities.
The client's agreement with Pantheon included an annual review of a portfolio managed by a third party under a discretionary mandate.
The Fos dismissed Pantheon’s claims, saying another ombudsman body had agreed with it Mrs G’s complaint was about an “act or omission by Pantheon in carrying on a regulated activity or an ancillary activity carried on by the firm in relation to a regulated activity” and as such fell under its jurisdiction.
Mr Pulzone stated: “In any event, I’ve not seen any evidence of what work, if any, Pantheon did for Mrs G between August 2015 and January 2016.
“There was no review, and certainly I’ve seen no evidence that one was planned. And it doesn’t appear that there was any further contact with Mrs G after August 2015 until January 2016.
“So in the circumstances, it wouldn’t appear fair and reasonable for Mrs G to be liable for fees under an agreement she thought she had validly terminated, when Pantheon didn’t do anything during that period to justify said fees.”
He ordered Pantheon to cancel the invoice related to fees payable after August 2015 and to pay Mrs G £150 for the trouble and upset its error had caused her.
carmen.reichman@ft.com
