Not upheld: inadequate disclosure and explanation of Early Withdrawal Charges structure complaint against St. James's Place Wealth Management Plc (SJPWM)

Decision detail

Summary

Mr G complained that SJPWM failed to adequately explain that Early Withdrawal Charges (EWCs) would apply to each subsequent investment into his retirement account as a separate tranche, not just the initial deposit. Between August 2020 and January 2025, Mr G made multiple deposits (lump sums and regular contributions) into the pension, each subject to EWCs starting at 6% and reducing annually. When Mr G withdrew his tax-free lump sum in January 2025 to clear his mortgage, he incurred an EWC of approximately £1,400. The ombudsman found that SJPWM provided clear, consistent, and repeated information about EWCs through recommendation letters, illustrations, and account summaries, explicitly stating that EWCs applied to all deposits and regular contributions. The different EWC rates for the October 2020 transfer (2.4%) versus direct deposits (6%) further demonstrated that EWCs applied to multiple investments. The complaint was not upheld as the ombudsman was satisfied that SJPWM provided sufficient clear information to enable Mr G to make an informed decision.

The Ombudsman's reasoning

The ombudsman found that SJPWM provided clear, consistent, and repeated information about EWCs throughout the relationship. The August 2020 recommendation letter explicitly stated that EWCs would apply to each regular contribution, and the illustrations consistently showed EWCs applicable to both single and regular contributions. The fact that different EWC rates applied to the October 2020 transfer (2.4%) compared to direct deposits (6%) further demonstrated that EWCs applied to multiple investments. Multiple summaries in subsequent illustrations and account recaps reiterated that EWCs applied to different investments made at different times. The ombudsman concluded that SJPWM's obligation was to provide relevant and clear information to enable an informed decision, which it did. The ombudsman also noted that the charging structure, while potentially not intuitive, was a matter of commercial discretion and that the FCA, not the ombudsman, is responsible for determining if charging structures are inherently unfair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website