Upheld: unfair charges / duplicate fees / lack of transparency complaint against Succession Wealth Management Limited

Decision detail

Summary

Mr and Mrs S complained that Succession Wealth Management Limited (SWM) unfairly charged them a monthly retainer fee in addition to an annual percentage-based ongoing advice charge after acquiring their previous adviser's firms in 2017. SWM claimed the retainer was for separate unregulated services, but the ombudsman found no evidence of such services being provided and concluded the retainer duplicated the annual charge for regulated advice and ancillary activities. The ombudsman upheld the complaint, finding the dual charging was unfair and unreasonable, and ordered SWM to refund all retainer payments with 8% interest plus £150 compensation for distress and inconvenience.

The Ombudsman's reasoning

The ombudsman found that jurisdiction and merits were intertwined. The key question was whether the retainer fee was genuinely for solely unregulated services. The ombudsman concluded that: (1) A2 (the unregulated entity) had its own separate agreement and became Succession Independent Schools, with which Mr and Mrs S had no relationship; (2) clients paid a fixed monthly fee to A1 (the regulated entity) for regulated financial advice; (3) SWM's OAC included ancillary activities such as tax efficiency assessments and liaison with accountants, which are ancillary to regulated advice; (4) there was no evidence SWM provided additional services to Mr and Mrs S beyond what was covered by the OAC; (5) the retainer was not explained in writing at acquisition, only referenced as a way to 'retain' Mr X as adviser; (6) the retainer therefore duplicated the OAC or was simply a fee to ensure a particular adviser, neither of which was fair or reasonable. The ombudsman found this fell within FOS jurisdiction as it related to regulated activities and ancillary activities.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website