Upheld: General financial advice complaint against Profile Financial Solutions Limited
Financial Ombudsman decision DRN-4728029 of 2024-04-29T00:00:00+00:00. General financial advice complaint against Profile Financial Solutions Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-4728029 |
|---|---|
| Decision date | 2024-04-29T00:00:00+00:00 |
| Firm | Profile Financial Solutions Limited |
| Product | Pension |
| Claim type | General financial advice |
| Outcome | Upheld |
| Remedy | Profile must: (1) calculate the loss by comparing the actual value of Mr P's LV= pension plan at transfer date with the notional value if ongoing adviser charges for 2016, 2017, 2018, 2020, 2021, and 2022 had not been paid; (2) bring any loss up to date using a 50/50 combination of Bank of England 1-year fixed rate bond average and FTSE UK Private Investors Income Total Return index; (3) pay compensation into Mr P's pension plan if possible (allowing for charges and tax relief), or directly to Mr P with a 15% reduction to account for notional income tax (20% basic rate applied to 75% of compensation for tax-free lump sum); (4) pay £100 for inconvenience caused; (5) provide clear calculation details to Mr P; (6) handle any income tax deduction on interest and provide tax deduction certificate if requested. |
Summary
Mr P transferred his pension to Profile in Summer 2016 and paid for ongoing advice services including annual reviews at 0.3% of fund value. Profile made numerous attempts to contact Mr P by email to arrange annual reviews from 2017 onwards, but Mr P did not respond to most emails. Only a 2019 review was completed. When Mr P complained in August 2022 that he had not received the annual reviews he paid for, Profile rejected the complaint stating it had invited reviews and monitored funds. The ombudsman upheld the complaint, finding that Profile failed to provide the contracted ongoing services because it relied solely on email communication despite Mr P's non-response pattern, and should have used alternative contact methods and implemented robust systems to ensure service delivery. Profile must refund the adviser charges for the years services were not provided, with compensation calculated using a 50/50 benchmark of fixed-rate bonds and equity indices, plus £100 for inconvenience.
The Ombudsman's reasoning
The ombudsman found that while Profile disclosed the ongoing service and charges clearly and provided cancellation rights, it failed to fulfill its obligation to provide personal recommendations and related services. Although Profile made numerous email contact attempts, this was insufficient because: (1) Mr P did not respond to the vast majority of emails, indicating email alone was inadequate; (2) Profile should have used alternative communication methods such as telephone or post once the pattern of non-response became clear; (3) the FCA guidance requires 'robust systems and controls' to ensure clients receive committed services; (4) Profile's internal monitoring activities without Mr P's involvement and without personalized recommendations did not satisfy regulatory obligations; and (5) only the 2019 review met the service standard.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Profile Financial Solutions Limited, all decisions | 22 | 46% |
| 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