Partially upheld: Investment mis-selling complaint against Redmayne-Bentley LLP

Decision detail

Summary

Mrs S complained about RB's management of her discretionary investment portfolio between March 2020 and February 2021, specifically regarding unavailability of her investment manager when she instructed liquidation on 16 March 2020 and the charging of 1% management fees while the portfolio remained uninvested in cash. The ombudsman found that the initial liquidation decision was the clients' own instruction and RB was not responsible for it. However, the ombudsman upheld the complaint regarding fees charged from 1 November 2020 onwards, finding that RB should have proactively recognized that the discretionary arrangement was no longer appropriate for clients who were clearly unwilling to reinvest and whose capital was being eroded by fees. RB should have explained alternative options such as cash ISA transfer to preserve tax status. The ombudsman awarded a refund of fees from 1 November 2020 to February 2021 and £250 compensation for distress and inconvenience.

The Ombudsman's reasoning

The ombudsman found that while RB was not responsible for the initial decision to liquidate in March 2020 (which was the clients' instruction), RB breached its regulatory obligations under FCA Principles and COBS 2.1 by continuing to charge a discretionary management fee from November 2020 onwards when it was clear the arrangement was no longer in the clients' best interests. By November 2020, it was evident that Mr and Mrs S were unable or unwilling to reinvest, their capital was being eroded by fees for a service not being provided, and RB should have proactively explained their options (including cash ISA transfer) and ended the discretionary arrangement. RB's failure to act in the clients' best interests by continuing to charge fees for a service that could not be delivered constituted unfair treatment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website