Not upheld: General financial advice complaint against 2 Plan Wealth Management Limited

Decision detail

Summary

Mr C, holding power of attorney for his father, engaged 2Plan to obtain advice on purchasing an annuity to cover care costs. After initially recommending an escalating annuity in September 2023, 2Plan changed their recommendation to a 'pay as you go' solution after Mr C altered key assumptions about savings returns and introduced a new requirement to retain funds for funeral costs. Mr C objected to the changed advice and the £2,750 in fees charged, arguing the advice should not have changed and that 'pay as you go' should have been recommended initially. The ombudsman found that 2Plan acted appropriately by reassessing advice when material assumptions changed, that the fees were clearly disclosed upfront, and that Mr C initiated the changes that led to the revised recommendation.

The Ombudsman's reasoning

The ombudsman found that 2Plan clearly communicated their advice process and fee structure upfront, and that Mr C was aware before proceeding that the adviser needed to ensure suitability. When Mr C changed key assumptions (savings returns and funeral cost reserves), 2Plan appropriately reassessed the advice to maintain suitability. The use of assumptions in financial advice is necessary and reasonable, and it is the adviser's responsibility to ensure assumptions remain realistic. The changes to assumptions and objectives were initiated by Mr C, not 2Plan, and therefore 2Plan should not be held accountable for the resulting fee charges. The interim report was based on the original assumptions which Mr C subsequently altered.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website