Not upheld: Account administration errors complaint against Jupiter Unit Trust Managers Limited

Decision detail

Summary

Mr C complained that Jupiter Unit Trust Managers Limited failed to switch his funds into institutional units with lower charges, citing an FCA directive requiring fund managers to move investors into the cheapest share class. The ombudsman found that the FCA's Asset Management Market Study was aimed at simplifying share classes and reducing commission within retail units, not at forcing identical charges across retail and institutional investors. Jupiter was entitled to set eligibility criteria for institutional units based on investment size thresholds (£5 million plus), and Mr C did not meet these criteria. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman agreed with the investigator that the FCA's directive was aimed at reducing historically high charges and commission on retail units, not at forcing businesses to charge retail and institutional investors identical fees regardless of investment size. The distinction between retail and institutional units is consistently maintained in FCA analysis. Jupiter is entitled to set eligibility criteria for institutional units, and the requirement to move investors to cheaper share classes applies to commission-free share classes within the same unit type, not across different unit types. Financial businesses have long offered lower charges on higher investment amounts, which is standard practice.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website