Not upheld: Investment mis-selling complaint against James Brearley & Sons Limited

Decision detail

Summary

Mr and Mrs R complained that JBS mis-sold them a discretionary managed investment portfolio when they wanted to invest in a small number of individual shares, particularly Shell. They claimed the portfolio was not invested quickly enough (being phased over six months), did not achieve the promised 4% returns, and that they were charged 2% rather than the agreed 1.1% plus VAT. JBS maintained the portfolio was suitable for their medium risk profile and income requirements of £1,000 per month. The ombudsman found the diversified portfolio was appropriate for their circumstances, the phased approach was clearly explained and reasonable, the management fees were correctly charged at 1.1% plus VAT, and that disappointing investment performance does not constitute mis-selling. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while Mr and Mrs R were disappointed with the portfolio's performance, disappointing returns do not constitute mis-selling. The diversified portfolio was suitable for their medium attitude to risk and investment objectives, which was a more cautious approach than their original proposal of concentrated individual share holdings. The phased investment approach was clearly explained in the January 2017 letter at a time when Mr and Mrs R could have cancelled the arrangement, and they made an informed choice to proceed. The management charges of 1.1% plus VAT were as agreed, and while there were additional fund charges within the portfolio, this was reasonable for a diversified medium-risk portfolio and would not have caused them to reject the portfolio idea.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website