Upheld: General financial advice complaint against KW Wealth Planning Limited
Financial Ombudsman decision DRN-4491325 of 2024-04-29T00:00:00+00:00. General financial advice complaint against KW Wealth Planning Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-4491325 |
|---|---|
| Decision date | 2024-04-29T00:00:00+00:00 |
| Firm | KW Wealth Planning Limited |
| Product | Pension |
| Claim type | General financial advice |
| Outcome | Upheld |
| Remedy | KW Wealth Planning Limited trading as Kingswood must: (1) Pay £3,803 for lost tax relief with 8% per annum simple interest from the date of initial investment until the decision date; (2) Refund all ongoing annual fees incurred by Mr S with 8% per annum simple interest from the date each charge was incurred until the decision date; (3) Provide Mr S with clear, simple details of all calculations; (4) Pay £500 total for distress and inconvenience (including any amounts already paid). |
Summary
Mr S complained that KW provided incorrect advice about maximising pension contributions through carried forward tax relief. KW misinterpreted how salary sacrifice contributions should be treated and underestimated Mr S's earnings, leading him to make a smaller contribution (c£13,500) than he could have (c£19,000 gross). KW acknowledged the errors and offered escalating compensation over several months. The ombudsman upheld the complaint and ordered KW to pay £3,803 for lost tax relief plus interest, refund ongoing service fees plus interest, and pay £500 for distress and inconvenience, but rejected compensation for lost future investment growth.
The Ombudsman's reasoning
KW made two critical mistakes: misinterpreting how salary sacrifice contributions should be treated and underestimating Mr S's earnings. These errors prevented Mr S from making the full pension contributions he intended using carried forward tax relief. The ombudsman determined that compensation should place Mr S back in the financial position he would have been in had the mistakes not occurred. The ombudsman rejected Mr S's claim for future investment growth compensation, reasoning that Mr S retained access to the funds and chose to invest them in home improvements instead. The ombudsman upheld the claim for lost tax relief (£3,803), refund of ongoing service fees not provided, and distress and inconvenience compensation (£500).
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| KW Wealth Planning Limited, all decisions | 5 | 50% |
| General financial advice, all decisions | 4,578 | 36% |
| Pension, all decisions | 15,579 | 47% |
Source
Read the original decision on the Financial Ombudsman Service website