Not upheld: suitability of advice, early withdrawal charges, limited product access complaint against St. James's Place Wealth Management Plc

Decision detail

Summary

X complained to the FOS about advice and service from St. James's Place Wealth Management regarding his pension benefits after suffering a health incident in 2025 that forced early retirement. SJP initially advised drawdown but X preferred an annuity for income stability and found a better rate with Standard Life, triggering an £18,000 early withdrawal charge. X argued the drawdown advice was unsuitable and designed to retain SJP's monthly fees, and that SJP should have waived or reduced the early withdrawal charge given his changed circumstances. The ombudsman did not uphold the complaint, finding the drawdown advice was reasonable given tax benefits, X suffered no loss as he did not follow it, and the early withdrawal charge was justified as deferred upfront advice costs.

The Ombudsman's reasoning

The ombudsman found that the advice to enter drawdown was not unsuitable given X's changed circumstances and the potential tax benefits of drawdown until 2027, particularly regarding inheritance tax treatment. The early withdrawal charge was justified as it represented deferred upfront advice costs that would have been charged immediately by other firms. Critically, X did not follow the drawdown advice and independently sourced a better annuity rate, meaning he suffered no financial loss from the advice. The ombudsman acknowledged X's frustration with SJP's tied status limiting annuity rates, but found this did not constitute a breach of rules.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website