Upheld: Other regulated complaint complaint against SUCCESSION WEALTH MANAGEMENT LIMITED

Decision detail

Summary

Mr M complained that SWM unfairly charged him a monthly retainer fee in addition to an annual percentage ongoing advice charge (OAC) after acquiring his previous adviser's firms in 2017. SWM argued the retainer was for separate unregulated services and outside the ombudsman's jurisdiction. The ombudsman found the complaint was within scope as it related to regulated advisory activities. The ombudsman concluded that the retainer either duplicated services already covered by the OAC or was simply a fee to retain a particular adviser, neither of which was fair or in Mr M's best interests. The ombudsman upheld the complaint and ordered SWM to refund all retainer payments with 8% interest and pay £150 compensation.

The Ombudsman's reasoning

The ombudsman found that although SWM argued the retainer related to unregulated services outside the ombudsman's jurisdiction, the complaint was within scope because it related to regulated activities or ancillary activities connected to regulated advice. The retainer was charged by SWM (a regulated firm) to Mr M (SWM's client) and either duplicated the OAC or was simply a fee to retain a particular adviser. Either way, it was not fairly charged. The ombudsman rejected SWM's argument that the retainer was for separate unregulated services, finding that: (1) Mr M had no relationship with the unregulated entity after acquisition; (2) no evidence supported that additional services were provided; (3) the retainer was not explained as being for unregulated services; and (4) Mr M's own account confirmed no additional services were received. The ombudsman concluded it was not in Mr M's best interests to pay an additional fee simply to retain a particular adviser, especially at no cost to SWM.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website