Not upheld: Investment mis-selling complaint against Barclays Bank Plc

Decision detail

Summary

Mrs S, represented by her husband Mr S, complained that Barclays charged unfair ongoing advisory fees for an illiquid investment fund (Clareant EDL Levered II Investment) because the firm could not provide regular ongoing advice due to the fund's illiquid nature. The £300,000 investment was made in 2016 with an upfront fee of 1.08% and ongoing annual fees of 0.7%. The ombudsman found that only charges paid between 2019 and 2025 fell within jurisdiction due to time limits, as Mr S should have known from 2016 that ongoing fees would apply and that full advice could not be given on the illiquid fund. On the merits, the ombudsman upheld Barclays' position, finding that the fund was sufficiently included in annual portfolio reviews and that the ongoing charges were justified as the fund was appropriately held in the Advisory Investment Service container at inception.

The Ombudsman's reasoning

The ombudsman found that although the fund was illiquid and could not be subject to full ongoing advice regarding disinvestment or additional investment, it was sufficiently included in the annual portfolio reviews. The fund was considered when assessing Mrs S's overall holdings, attitude to risk, and suitability against her needs and objectives. The ombudsman was satisfied that the ongoing advice charges were justified as they were in return for a service Barclays did provide. The ombudsman also found it was reasonable for the fund to be held in the Advisory Investment Service container at inception because advice was given on the fund specifically, including guidance on the investment amount. The later offer to move the fund to an Execution Only container in 2022 did not persuade the ombudsman that the original placement in AIS was wrong, as technical or system restrictions may have changed over time.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website