Partially upheld: unjustified ongoing advisory fees and failure to ensure tax relief was claimed complaint against Fairstone Financial Management Limited
Financial Ombudsman decision DRN-6339933 of 2026-05-27T00:00:00+00:00. unjustified ongoing advisory fees and failure to ensure tax relief was claimed complaint against Fairstone Financial Management Limited. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6339933 |
|---|---|
| Decision date | 2026-05-27T00:00:00+00:00 |
| Firm | Fairstone Financial Management Limited |
| Product | financial planning and investment advice |
| Claim type | unjustified ongoing advisory fees and failure to ensure tax relief was claimed |
| Outcome | Partially upheld |
| Remedy | Fairstone Financial Management Limited directed to: (1) Refund any fees, charges or tax paid by Mrs D in cash with 8% simple interest per annum from date of payment to final decision date; (2) Calculate loss by comparing actual investment value to notional value as if no ongoing advice fees had been deducted as at final decision date; (3) If notional value exceeds actual value, pay the loss as lump sum compensation accounting for charges and tax implications; (4) If investments were sold prior to final decision, calculate loss at sale date and add 8% simple interest per annum from sale date to final decision date; (5) Pay 8% simple interest per annum on total compensation from final decision date to settlement date if payment takes longer than 28 days. |
Summary
Mrs D received financial planning advice from Fairstone in 2015 recommending investments in an EIS and an Inheritance Tax Service fund, with ongoing fees of 0.75% charged on the latter. After Mrs D's death, her estate complained that Fairstone charged ongoing fees despite providing minimal ongoing advice, failed to ensure income tax relief certificates were claimed (now expired), and did not obtain CGT liability information. The ombudsman upheld the complaint regarding unjustified ongoing fees and directed Fairstone to refund them with compensation for consequential losses. However, the ombudsman declined to award compensation for lost tax relief, finding that Mrs D's accountant, not Fairstone, bore responsibility for ensuring accurate tax returns and requesting necessary information from Mrs D.
The Ombudsman's reasoning
The ombudsman found that Fairstone's offer to refund ongoing advice fees was appropriate because Mrs D received very little ongoing advice despite being charged 0.75% of her Octopus investments. However, the ombudsman declined to award compensation for lost income tax relief because Mrs D's accountant, not Fairstone, bore responsibility for ensuring accurate tax returns were filed and for requesting necessary information from Mrs D. Although Ingenious sent certificates recommending they be forwarded to her adviser, Mrs D did not provide them to anyone, and her accountant should have proactively requested information about all her financial circumstances. The ombudsman also found Fairstone was not responsible for obtaining CGT information from Firm B, as this was Mrs D's responsibility to request. The key distinction made was that even if Fairstone had an obligation to pass investment information to the accountant, compensation for tax relief loss would not be fair because the loss resulted from the accountant's failure to perform their role, not Fairstone's actions.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Fairstone Financial Management Limited, all decisions | 39 | 55% |
Source
Read the original decision on the Financial Ombudsman Service website