Not upheld: administrative error in pension withdrawal / failure to mitigate losses complaint against St. James's Place Wealth Management Plc

Decision detail

Summary

Mr and Mrs C complained that SJP's representative made an error causing £120,000 tax-free cash from a pension to be sent to a current account rather than Mrs C's Unit Trust for investment. They claimed this resulted in loss of investment returns estimated at around £4,500 plus additional costs from higher unit prices. SJP acknowledged the error in September 2025 and offered £500 compensation for distress and inconvenience. The ombudsman found that while SJP's error was clear, Mr and Mrs C failed to mitigate losses by not reinvesting the funds as soon as reasonably possible, particularly after unit prices fell in May 2025. The ombudsman upheld SJP's £500 compensation offer as fair and reasonable for the distress caused, but rejected the claim for financial loss compensation.

The Ombudsman's reasoning

The ombudsman found that while SJP made a clear administrative error, Mr and Mrs C failed to mitigate their losses by not reinvesting the funds in the originally planned fund as soon as reasonably possible after the initial transfer difficulties. The ombudsman noted that unit prices were lower on 1 May 2025 than on 17 March 2025, providing an opportunity to reinvest without loss. Mr and Mrs C's decision to retain the funds in cash and use them for living expenses instead of investing as planned broke the chain of causation between SJP's error and any claimed financial loss. The ombudsman accepted that SJP's error caused considerable distress and inconvenience over several months, justifying compensation in the mid-range of FOS guidelines (£300-£750), making the £500 offer appropriate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website