Not upheld: Service failures generally complaint against Embark Investment Services Limited

Decision detail

Summary

Mr L complained that Scottish Widows unfairly increased charges on his pension account by approximately £1,400 per annum following novation of his investment to his adviser C's new firm. Mr L argued that since his individual adviser had not changed, the fees should not have increased. The ombudsman rejected the complaint, finding that agency agreements between product providers and advisory firms operate at firm level, not individual adviser level. The Terms & Conditions explicitly provided for charging changes when the advisory firm changed, and Scottish Widows applied the new firm's standard charging structure consistently to all clients. The ombudsman concluded that any negotiation regarding preferential terms was a matter for the advisory firm to address with Scottish Widows.

The Ombudsman's reasoning

Agency agreements between product providers and advisory firms are structured at firm level, not individual adviser level. This is standard industry practice. The Terms & Conditions explicitly defined 'Financial Adviser' as an employee or contractor of a Financial Adviser Firm, meaning charges are paid to the firm, not the individual adviser. When Mr L's arrangement was novated to C's new firm, the new firm's charging structure applied. Any negotiation regarding preferential terms was a matter for the advisory firm to address with Scottish Widows, not Scottish Widows' responsibility to Mr L directly.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website