Partially upheld: Investment mis-selling complaint against Rathbones Investment Management Limited trading as Rathbones
Financial Ombudsman decision DRN-6462892 of 2026-06-30T00:00:00+00:00. Investment mis-selling complaint against Rathbones Investment Management Limited trading as Rathbones. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6462892 |
|---|---|
| Decision date | 2026-06-30T00:00:00+00:00 |
| Firm | Rathbones Investment Management Limited trading as Rathbones |
| Product | Investment |
| Claim type | Investment mis-selling |
| Outcome | Partially upheld |
| Remedy | Rathbones must compare performance of Mrs W's ISA against FTSE UK Private Investors Income Total Return Index benchmark from date of investment to date of final decision (or transfer date if transferred away). Rathbones must pay difference if actual value is less than fair value. Rathbones must also pay £350 for distress and inconvenience. If transferred away, loss must be brought up to date using benchmark. Payment due within 28 calendar days. 8% simple interest per annum applies if payment delayed. |
Summary
Mrs W complained that Rathbones failed to manage her ISA in line with her agreed medium-risk mandate and paid undisclosed commission to a third-party introducer. Rathbones managed Mrs W's ISA on a combined basis with her husband's portfolio and had a pre-RDR introducer agreement with a third party. The ombudsman upheld the complaint regarding unsuitable combined portfolio management, finding Mrs W's separate financial circumstances warranted individual management, but rejected the undisclosed commission complaint as Mrs W would likely have proceeded regardless. Compensation is ordered based on comparison of actual ISA performance against a medium-risk benchmark index, with £350 for distress and inconvenience.
The Ombudsman's reasoning
The ombudsman found that while the introducer fee was not disclosed, Mrs W would likely not have declined the investment advice had she been told, as she needed regulated advice and was investing significant sums through a professional introduction. However, managing Mrs W's ISA on a combined basis with her husband's portfolio was unsuitable because Mrs W had separate financial circumstances, objectives and needs. The ombudsman rejected the investigator's reasoning that no loss occurred, finding that a proper comparison against a medium-risk benchmark was necessary to determine if Mrs W suffered financial detriment.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Rathbones Investment Management Limited trading as Rathbones, all decisions | 2 | 50% |
| Investment mis-selling, all decisions | 14,175 | 37% |
| Investment, all decisions | 14,229 | 34% |
Source
Read the original decision on the Financial Ombudsman Service website