Not upheld: trail commission charges without agreed services complaint against Foster Denovo Limited trading as Secondsight

Decision detail

Summary

Mr B complained that Secondsight accepted trail commission from his pension for 14 years (2011-2025) without providing any services in return. He paid £1,772.50 in total and claimed to have received no contact, advice, reviews or servicing from Secondsight after leaving his employer in 2012. Secondsight argued the commission was disclosed in the original documentation and was for 'arranging' the plan, with educational workshops and query support available through his employer. The ombudsman found the commission was clearly disclosed at the point of sale, no specific ongoing services were contractually agreed to be provided, and Secondsight's acceptance of the commission complied with regulatory rules permitting trail commission on existing policies. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the renewal commission was clearly disclosed to Mr B in the documentation provided at the time of sale in 2011. The primary explanation for the commission was that Secondsight was being paid for 'arranging' the plan, not for providing ongoing services. While Secondsight mentioned educational workshops and query support were available through Mr B's employer, there was no evidence of a specific agreement to deliver the level of ongoing service Mr B now expects. The RDR rules introduced in 2012 aimed to increase transparency for future contracts but did not require businesses to retroactively clarify terms on existing policies. Secondsight's acceptance of the commission was in line with the agreement and regulatory rules permitting firms to continue receiving trail commission on existing policies.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website