Not upheld: Service failures generally complaint against Financial Administration Services Limited (Fidelity)

Decision detail

Summary

Mr K complained that Fidelity failed to provide sufficient notice of a fund closure, arguing it should have notified him within two weeks of receiving notification from the fund manager on 24 July 2018, rather than waiting until 21 November 2018. Mr K claimed this breached COLL rules, MAR/DTR regulations, and FCA principles, and caused him financial loss and distress. Fidelity argued it provided reasonable three-week notice and had to conduct internal governance reviews before communicating to customers. The ombudsman found that Fidelity's internal processes were reasonable, the three-week notice was sufficient, and Mr K's failure to act during that period did not demonstrate he would have acted earlier. The complaint was not upheld, with the ombudsman rejecting arguments based on regulations that did not apply to platform providers or post-dated the events in question.

The Ombudsman's reasoning

The ombudsman found that while Fidelity received notification on 24 July 2018, it required time to verify information, conduct internal governance reviews (legal, compliance, product, operational), identify all affected customers, and draft clear communications. The three-week notice period provided to Mr K was considered sufficient to allow him to consider and take action. The ombudsman rejected arguments based on COLL (which applies to fund managers, not platform providers), MAR/DTR (not applicable to this B2C information flow), and the Consumer Duty (which came into force in 2023, after the 2018 events). The ombudsman noted Fidelity had to balance Mr K's interests with those of all customers holding the fund. The fact Mr K did not sell during the notice period did not demonstrate he would have sold earlier with more notice.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website