Not upheld: unfair suspension of pension fund access and misleading documentation regarding suspension duration complaint against St James's Place Wealth Management Plc

Decision detail

Summary

Mr S complained that SJP unfairly suspended withdrawals from his SJP Property Fund investment (approximately £9,000 of his £780,000 pension) for longer than the six months stated in his investment documents, preventing him from transferring the full amount to purchase an annuity in April 2025. While the ombudsman acknowledged the investment documents were misleading, it found SJP acted reasonably in extending the suspension beyond six months due to market-wide illiquidity issues affecting property funds, and that releasing funds at a discount would not produce good customer outcomes. The ombudsman concluded that Mr S would likely have made the investment regardless of the six-month reference, that communications were adequate, and that ongoing administration fees were justified. The complaint was not upheld.

The Ombudsman's reasoning

While the investment documents were misleading in suggesting suspensions would only last up to six months, SJP acted reasonably in extending the suspension beyond this period due to genuine market illiquidity issues affecting property funds industry-wide. The ombudsman found that releasing funds at a substantial discount to fair market value would not result in good customer outcomes and would treat Mr S more favourably than other investors in the same fund. The remedy for misrepresentation is to place a person in the position they would have been in had the misstatement not been made, not to make the misrepresentation true. The ombudsman concluded Mr S would likely have made the investment regardless of the six-month reference, given the documents clearly disclosed liquidity risks. Communications were adequately provided, and administration fees were justified as SJP continued to manage the account and wind-down process.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website