Not upheld: charges disclosure and alleged agreement regarding waiver of initial advice fees complaint against St. James's Place Wealth Management Plc

Decision detail

Summary

Mr and Mrs R invested approximately £2,000,000 with SJP in 2017-2018 across unit trusts and investment bonds. They believed they had negotiated an agreement that the initial advice charge would be waived, with the adviser to be remunerated solely through ongoing 0.5% annual charges. In 2025, they discovered a 4.5% initial advice charge had been applied to the bonds. The ombudsman found that while no upfront charges were taken (as agreed), the product illustrations clearly disclosed the 4.5% initial advice charge for bonds, distinguishing them from unit trusts where the charge was waived. The ombudsman rejected the complaint, finding no documentary evidence of an agreement to provide advice entirely free of charge and concluding that the illustrations provided sufficient clarity about the charging structure.

The Ombudsman's reasoning

The ombudsman distinguished between 'no initial charges' (meaning no upfront costs taken at the point of investment) and 'free advice'. The adviser's communications and product illustrations confirmed that no upfront charges would be applied, which was honoured. However, the illustrations clearly disclosed that the bonds carried a 4.5% initial advice charge, contrary to Mr R's understanding. The ombudsman found it unlikely that SJP would have agreed to provide advice on a £2,000,000 investment entirely free of charge, particularly given the significant work involved. The ongoing advice charges were separate and distinct, paying for annual reviews and ongoing services, not the initial advice. The ombudsman concluded that sufficient information was provided in the illustrations and that Mr R should have reviewed them, particularly given the bespoke arrangement made regarding the unit trust waiver.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website