Not upheld: Investment mis-selling complaint against Jarvis Investment Management Limited

Decision detail

Summary

Mr N complained that LSE allowed him to open an execution only share dealing account that was unsuitable for him, resulting in losses of £43,808. He alleged LSE failed to warn him of risks, misled him about commissions, and benefited from a commission structure that incentivized excessive trading without assessing his best interests. LSE responded that the account was execution only (not requiring appropriateness testing), charges were disclosed upfront, and Mr N made his own trading decisions. The ombudsman upheld LSE's position, finding that no appropriateness test was required for non-complex shares, Mr N agreed to the fee structure, and there was no evidence LSE influenced trading frequency. The ombudsman also noted that Mr N's account showed a net profit of approximately £46,200 rather than losses, which Mr N failed to substantiate.

The Ombudsman's reasoning

The ombudsman determined that because Mr N's account was execution only and traded in non-complex listed shares, the appropriateness and suitability tests under COBS did not apply. LSE was not providing advice and made no personal recommendations. Mr N agreed to the flat fee structure upfront and knew the cost per trade in advance. There was no evidence LSE influenced or enabled excessive trading, and Mr N's trading was entirely of his own volition. The ombudsman found no breach of FCA Principles and noted that Mr N appeared to have made a profit rather than losses, which he failed to substantiate when asked.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website