Not upheld: failure to provide financial advice and pension administration services; failure to invest employer contributions; failure to set clear service boundaries complaint against St James's Place Wealth Management Plc trading as St James's Place (SJP)

Decision detail

Summary

Mr B held a SIPP as part of his employer T's Group SIPP scheme, with SJP providing administration and advice paid for by the employer. When Mr B left T in 2017, he retained his SIPP but SJP did not clarify that he was no longer entitled to free ongoing advice and administration. In 2021, Mr B's new employer C began paying £1,500 monthly contributions to his SIPP, which sat uninvested in the cash account for eighteen months. Mr B complained that SJP failed to invest these contributions and provide ongoing service, claiming there was an unwritten agreement that he would receive free advice in exchange for introducing C's business to SJP. The ombudsman found that no such contractual relationship existed and that SJP should have clearly communicated in 2017 that Mr B would need to either pay for ongoing advice or move to a self-directed SIPP platform, but concluded that the service Mr B expected was not one he was entitled to receive.

The Ombudsman's reasoning

The ombudsman found that while there was lack of clarity about how Mr B's relationship with SJP changed when he left T's employment, SJP was not obliged to continue providing the same level of financial advice and support that had been paid for by his employer. There was no contractual relationship between SJP and Mr B; the relationship was with T. Financial advice and administration are professional services that are not free, and any arrangement whereby C's fees to SJP entitled Mr B to free financial advice should have been explicitly set out in a written agreement rather than discussed verbally. SJP's error was in failing to set clear boundaries and expectations about their obligations towards Mr B once he left T, rather than in failing to invest contributions or monitor portfolio performance. The adviser should have explained in 2017 that Mr B would need to either sign a personal client agreement and pay fees, or move to a different SIPP platform that was not adviser-only. By continuing to carry out Mr B's instructions on an ad hoc basis without a formal arrangement, SJP reinforced a false impression of entitlement to services.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website