Upheld: Account administration errors complaint against Wesleyan Financial Services Ltd

Decision detail

Summary

Mr A invested in a With Profits ISA with Wesleyan in March 2019 and was led to believe the only ongoing fee would be 1.2% Annual Management Charge. In 2022, he discovered he was also being charged 0.2% in transaction costs, totalling 1.4%. The ombudsman found that the key facts document provided in 2019 did not adequately disclose the transaction costs, failing to meet FCA requirements for clear, fair and not misleading information. Wesleyan's failure to respond to queries about discrepancies between the original and later versions of its fees document supported this finding. The ombudsman upheld the complaint and ordered £200 compensation for distress and inconvenience, but declined to order a refund of excess fees as this would place Mr A in a position he could never have occupied.

The Ombudsman's reasoning

The ombudsman found that Wesleyan failed to comply with FCA COBS 4.2 by not providing clear information about transaction costs. The original key facts document given to Mr A in 2019 did not mention transaction costs, and the vague reference to 'expenses and other adjustments' was insufficient to inform Mr A that additional charges would apply. Wesleyan's failure to respond to the Investigator's queries about the discrepancies between the two versions of the fees document supported the conclusion that the original document lacked proper fee disclosure. While the ombudsman could not order removal of the fees themselves (as these are a commercial decision for Wesleyan), the lack of disclosure caused Mr A distress and inconvenience by preventing him from making an informed investment decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website