Not upheld: excessive management fees and unsuitable investment recommendations complaint against JPA Financial Services Limited

Decision detail

Summary

Mr L complained that JPA Financial Services charged excessive management fees (1% annually) while his pension investments declined in value. JPA had taken over servicing of Mr L's pension in September 2020 following a transfer arranged by Firm N. The ombudsman found that while JPA was not responsible for the initial pension transfer recommendation, it was responsible for the ongoing management service. The fee structure was clearly disclosed and agreed by Mr L in the client agreement. JPA demonstrated it conducted the contracted annual reviews and even recommended switching from the HSBC portfolio to funds better aligned with Mr L's risk profile. The pension value decline resulted from market conditions during the Covid pandemic and Mr L's own withdrawals, not from JPA's management. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman distinguished between JPA's responsibility (ongoing management from September 2020 onwards) and Firm N's responsibility (initial pension transfer recommendation). While JPA was not responsible for the pension transfer decision, it was responsible for the ongoing service. The ombudsman found the 1% fee was clearly disclosed and agreed, JPA delivered the contracted annual reviews, and the pension value decline resulted from market conditions during Covid and Mr L's own withdrawals, not from JPA's management decisions. JPA's recommendation to switch from the HSBC portfolio to funds better matching Mr L's risk profile demonstrated it was acting in his best interests.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website