Ascot Lloyd Limited · DRN-6023772

The complaint Ms C has complained about the service she has received from Ascot Lloyd Limited in relation to her pension plan. She says she’s been paying Ongoing Adviser Charges (‘OACs’) yet her adviser failed to follow her instructions and didn’t provide annual reviews of her plan. What happened In September 2017 Ms C decided to transfer her existing pension to a low-risk Self Invested Personal pension (‘SIPP’) plan. She did this via Capital Professional Limited, then trading as Bellpenny. In February 2019 Ms C changed the terms of her service agreement and set up a new agreement with Capital Professional Limited, now trading as Ascot Lloyd. Under this agreement she was paying a 1% annual fee for ongoing advice and annual reviews. A review of her pension was conducted by her adviser in 2018 and 2019. At an annual review on 4 March 2020, Ms C explained that she wanted to drawdown a small income from her pension in both the 2019/2020 and 2020/2021 tax years so that her income remained below the £12,500 basic rate tax threshold. Her adviser recommended she withdrew just over £2,000 for 2019/2020 and just over £10,000 for 2020/2021. Ms C and her adviser, who I’ll refer to as ‘Mr T’, were in contact about this throughout March, but ultimately neither of the withdrawals went ahead. Ms C says she was unhappy with this and phoned Ascot Lloyd in May 2020 to say that she didn’t want Mr T to continue to service her pension. Ms C says she didn’t hear from Ascot Lloyd or Mr T until she received an invitation to an annual review via a letter dated 29 March 2021 from Mr T. Ms C says she chose not to respond given her previous conversation with Ascot Lloyd in 2020. Mr T sent Ms C further annual review invitations on 9 June 2022 and 4 July 2023 – Ms C didn’t respond to any of these invitations either. In 2024 Ms C has told us that she had decided to withdraw the maximum sum she could within her 20% tax allowance and so she telephoned Ascot Lloyd on 8 March 2024, presuming that she could instruct it to carry out this action. However, she was told that she had to first speak to a financial adviser. On 11 March 2024 Ms C had a conversation with a new adviser appointed to her, Mr L, and was asked to go into the Ascot Lloyd office so she could sign the relevant paperwork to enact the drawdown. She did this on 14 March 2024 where it was confirmed she would withdraw just under £40,000 from her pension in the 2023/2024 tax year and that this withdrawal would be made on an execution-only basis. Ms C also raised her dissatisfaction with the service she had received from her previous adviser, Mr T, and explained that she hadn’t had any annual reviews during the previous three years. As a result of this, Mr L raised a complaint internally with Ascot Lloyd.

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Ascot Lloyd sent Ms C a final response letter on 20 March 2024 explaining why it didn’t uphold her complaint. It said that a review was conducted on 17 March 2020 which included the withdrawal recommendation but that a signed action plan wasn’t received; and that a file note showed that Ms C had changed her mind about the withdrawal on 12 May 2020. In respect of the annual reviews in 2021, 2022 and 2023, it said attempts had been made to contact her for a review but it received no response. So, because Ascot Lloyd had invited Ms C for a review, but she didn’t reply, it said it was entitled to retain the OACs that she had paid for those reviews. With regard to the withdrawal request Ms C made in March 2024 for the tax year 2023/2024, this wasn’t processed within the time frames she had requested and instead was processed in the 2024/2025 tax year. As a result of this Ms C complained again to Ascot Lloyd. Ms C was sent another final response letter on 3 July 2024 which didn’t uphold her complaint. It confirmed that Mr L had passed the withdrawal instruction to the administration team to proceed with the withdrawal on 19 March 2024 but that information from her SIPP provider stated the final cut-off date for payments prior to tax year end was 20 March 2024. Therefore, there was insufficient time to process the request. Ms C was reminded that Mr L had highlighted the possibility that the payment might not be paid before the tax year end. The letter went on to confirm that Ms C cancelled the payment when she found out it hadn’t been processed in line with her instructions and her pension provider processed the cancellation on 17 June 2024. As such Ms C had been placed back into the position as if no withdrawal had been made. Ms C referred her complaints to us to investigate on 7 August 2024. Following her submission Ms C confirmed with her SIPP provider that her withdrawal instruction in 2024 was made on 26 March 2024. And other enquiries confirmed the deadline for instructing a taxable income instruction, in which sales were required and for income tax to be calculated in the 2019/2020 tax year, was 18 March 2020. The complaint was assessed by one of our Investigators who felt it should be upheld. He thought that Ascot Lloyd should refund the charges Ms C had paid for the reviews that didn’t take place in 2021, 2022 and 2023. He also made an award to Ms C for the sum of £400 due to Ascot Lloyds failure to process her withdrawal requests in a timely manner in 2020 and 2024. He felt that this had caused Ms C unreasonable levels of frustration and annoyance which Ascot Lloyd needed to recognise. Ascot Lloyd agreed with the eventual outcome. However, Ms C didn’t and explained that she felt the charges for the reviews in 2020 and 2024 should also be refunded. She explained this was because in 2020, it seemed Mr T had ignored her withdrawal instructions and so hadn’t fulfilled his contractual services to her. And for the review in 2024 she felt that she didn’t want a review at that time and didn’t need one and had made it clear that the withdrawal at that time was being carried out on an execution-only basis. Therefore, Mr L hadn’t provided any services which justified him receiving any payment. The Investigator wasn’t persuaded to change his opinion so the complaint was passed to an Ombudsman to make a decision. An Ombudsman made a provisional decision. She agreed that Ascot Lloyd should refund the OACs for 2021, 2022 and 2023, plus a return, but she also thought that Ascot Lloyd should refund the OACs charged in 2024 as well. This was because she thought Ascot Lloyd ought to have dealt with Ms C’s request to remove Mr T in May 2020 and this would’ve resulted in the ongoing advice contract being terminated. But she thought that Ascot Lloyd was entitled to retain the fee it would’ve charged to carry out her withdrawal on an execution-only basis. The Ombudsman didn’t believe that Ascot Lloyd was responsible for the withdrawal in 2024 not going ahead in time, but she thought it had

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delayed the 2020 withdrawal. She thought the £400 the Investigator had recommended was reasonable. Ms C didn’t agree. She didn’t think it was reasonable for Ascot Lloyd to retain any fees for 2020 or 2024 given that it hadn’t actioned her withdrawal requests, even though they were both made in good time. Ms C said that she had suffered a tangible loss because in 2020 she lost the benefit of taking money from her pension tax-free and in 2024 she lost the benefit of taking further income and only paying the basic rate of tax. The case was subsequently referred to me. After considering the evidence and Ms C’s response to the provisional decision, I contacted both parties to set out my provisional findings. Briefly, I said: • I thought Ascot Lloyd should refund the OACs taken for the reviews due in 2021, 2022, 2023 and 2024, together with a return, as Ascot Lloyd ought to have cancelled the ongoing advice contract in May 2020. • I thought that Ascot Lloyd ought to have processed Ms C’s withdrawal requests made in 2020 and 2024 in time for the SIPP provider to process it within the current financial years. I thought that the failure to do so caused Ms C significant distress and inconvenience. I recommended that Ascot Lloyd should pay a total of £900 for the upset this caused. • Although Ascot Lloyd didn’t process Ms C’s withdrawal request in 2020 in time, I was satisfied that it provided the annual review in that year so I wasn’t recommending that the OACs for that year to be refunded. • I didn’t think it would be reasonable to retain any fee charged in 2024; while Ascot Lloyd would’ve likely charged a fee for arranging the withdrawal, ultimately it didn’t provide the service Ms C wanted so I didn’t think it would be reasonable for it to charge any fee for this in the circumstances. Ascot Lloyd didn’t agree that there was a delay in 2020 – it said Ms C cancelled the withdrawal. It didn’t agree that £900 was fair compensation. Ms C maintained that Ascot Lloyd shouldn’t be allowed to retain any fee for the services provided in 2020 because it completely disregarded both of her withdrawal requests, it didn’t just delay them. This was a breach of the adviser’s professional duty. This led to her losing tax-free money and this hasn’t been fully considered. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. In bringing this complaint Ms C has made many detailed points. I have considered everything she’s said in response to the provisional decision and my later communications, as well as all the supporting materials she’s referred to. However, I won’t be addressing each and every point raised. Instead, I’ve focused on what I consider to be the key issues here. So, if there's something I haven’t mentioned, it isn’t because I’ve ignored it. It’s because I'm satisfied I don’t need to comment on it to be able to reach what I think is a fair and reasonable outcome in the circumstances of this complaint. Ms C has complained about several issues so I’ll address each in turn.

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The annual reviews that were missed in 2021, 2022 and 2023 Ms C was sent letters in each of these years inviting her to have an annual review of her plan. Ms C says that she made the conscious decision to ignore them and not take Ascot Lloyd up on its offer because of her experience in 2020. So, despite paying OACs in these years, her pension was not reviewed. Ascot Lloyd believes that it was entitled to retain these fees. That’s because the FCA’s guidance says if a business is ‘ready, willing and able’ to conduct a review but the customer consciously declines this, or ignores the invitations for a review, the business is entitled to retain the charges it received even though the review didn’t take place. While I recognise the guidance on this point, I don’t think it would be reasonable for Ascot Lloyd to retain the OACs for these years in the circumstances of this complaint. This is because of what happened in May 2020. Ms C has told us that she telephoned Ascot Lloyd on 12 May 2020 to communicate her disappointment with her adviser after finding out that her withdrawal for the year 2019/2020 hadn’t been processed in time. She says she told Ascot Lloyd that she didn’t want Mr T to continue to service her pensions. She also confirmed she didn’t want the withdrawal for the tax year 2020/2021 to go ahead. And she also asked if there was a cost to transfer her pension elsewhere. Ascot Lloyd provided its record of the phone call to this Service during the investigation stage which simply read “as per (Mr T’s) email, client has changed mind on this”. I’m persuaded by what Ms C has told us about the telephone call she made to Ascot Lloyd. I appreciate that Ascot Lloyd’s record of that call refers only to Ms C confirming the withdrawals were not to go ahead, but I think Ms C’s account is more likely given the level of details provided by her in making this complaint and the consistency in that information. And ultimately I’m persuaded that she did request that Mr T have nothing further to do with her account. As such, I don’t think Ascot Lloyd’s record keeping of that call was accurate. In light of the above, I think Ascot Lloyd should have acted in response to this call, either by appointing a new financial adviser or engaging further with Ms C about what she wanted. But it appears not to have done anything. I think this lack of action casts serious doubt on whether it was ‘ready, willing and able’ to provide the annual reviews in 2021, 2022 and 2023 because it seemingly ignored Ms C’s request to change her adviser. Given Ms C’s feelings about Mr T and the reasons behind this I don’t think it’s unreasonable that when she received the letters from Mr T inviting her for a review that she ignored them. Ms C was unhappy with the service provided by him so I can understand why she didn’t respond to the invitations for an annual review. Arguably Ms C could have contacted Ascot Lloyd again to query what was going on with finding her a new adviser, however, had Ascot Lloyd acted in the way it should have Ms C wouldn’t have needed to do that. Furthermore, I think that if Ascot Lloyd had actually contacted Ms C in response to her dissatisfaction with Mr T, it would’ve found that Ms C would’ve most likely wanted to terminate her ongoing advice contract with Ascot Lloyd. I say this because Ms C didn’t engage with Ascot Lloyd for around four years after this call, so it seems to me that if Ms C had been given the opportunity to consider what sort of ongoing relationship she wanted with Ascot Lloyd at that point in time, I think she would’ve most likely opted to cancel it. This means that ultimately I believe if Ascot Lloyd had done what it should have done in May 2020, Ms C’s ongoing advice contract with Ascot Lloyd would’ve been cancelled and she wouldn’t have paid fees for this service thereafter.

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So, overall, I don’t think it was fair or reasonable for Ascot Lloyd to charge Ms C for the missed reviews that should have taken place in 2021, 2022 and 2023. These fees should therefore be refunded to her together with a return had they remained invested. I have provided the redress method for this below. The review that took place in 2020 and the withdrawal request I’ve reviewed the notes made by Mr T in 2020 during the review meeting which took place on 4 March 2020 and I’m satisfied that a review took place as it should have done. Mr T and Ms C discussed her current earnings and what she would be earning in a year’s time when her state pension was due to start and it covered what annual income she would need when she retired. It also recorded that Ms C had commented that she had been pleased with the performance of the pension and that it had recovered from the loss of the previous year. The notes also showed that the adviser offered to review Ms C’s risk profile, but she declined saying she was happy with risk level ‘4’ and saw no reason to change it. Her other savings and liabilities were also reviewed along with noting whether she had any plans in place that would require cash in the future. It also noted that she wanted to take up the personal allowance for that tax year as well as how she would maximise her personal allowance for the next tax year. In light of this information, and my being satisfied that a review took place, I think it’s only fair and reasonable that the charge Ms C has paid for this review be retained by Ascot Lloyd as the service she was paying for was provided to her. I appreciate Ms C has said that Mr T failed to follow her instructions and so Mr T didn’t earn his money, but this is a separate issue which I’ll deal with below. Ms C was paying for an annual review service, which entitled her to a review of her circumstances and attitude to risk, so that the adviser could assess whether her pension arrangements remained suitable. I’m satisfied that she received this. With regard to the 2020 withdrawal, I can see that at the annual review on 4 March 2020 Ms C explained that she wanted to drawdown a small income from her pension in both the 2019/2020 and 2020/2021 tax years so that her income remained below the £12,500 basic rate tax threshold. The adviser recommended she withdrew just over £2,000 for 2019/2020 and just over £10,000 for 2020/2021. On 10 March 2020 Ms C and Mr T exchanged text messages. Ms C was chasing up her withdrawal and Mr T replied that he was on holiday abroad. Ms C and her adviser exchanged further text messages on 17 March 2020 as Ms C was chasing up her withdrawal again. Mr T replied saying he would send her a form that she had to sign to enable the withdrawal. Ms C was sent a suitability letter dated 17 March 2020 which included a declaration for Ms C to sign and return. Ms C said she signed and returned this declaration and signed a separate form from the pension provider on 18 March 2020. On 23 March 2020 the adviser contacted Ms C via text message again to say that markets had fallen and he recommended that she didn’t withdraw any money from her pension at that time. He said he would monitor the situation to see if the markets improved before 5 April 2020. Ms C said she was confused by this because she thought the payment had already been processed given how much time had passed since she had confirmed this was what she wanted to do on 4 March 2020. She queried this with her adviser but didn’t receive any further contact from him. Ms C has said that she later found out that when this conversation was happening with Mr T it was already too late for any withdrawal from her SIPP to go through in her desired tax

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year. That’s because the SIPP provider has confirmed that the last date for the request to go through to it was 18 March 2020. Neither of Ms C’s withdrawal requests for a payment in the 2019/2020 and 2020/2021 tax year were processed by her adviser. It was following this episode that Ms C telephoned Ascot Lloyd on 12 May 2020 to express her disappointment and to confirm that she didn’t want either of the withdrawals to go ahead. Based on what I’ve seen, I see no reason why this withdrawal shouldn’t have gone through on time to meet the cut off to be paid in the 2019/2020 financial year. Ms C made her intentions clear on 4 March 2020 and this gave Mr T plenty of time to arrange for the withdrawal, even if he needed to provide a recommendation letter. But there was a delay of almost two weeks in him providing this, meaning the cut-off date was missed. This understandably led to Ms C experiencing considerable stress and anxiety. She then cancelled her withdrawal for the following year because of her experience. Ms C says that she suffered a significant financial loss because she wasn’t able to make use her full personal allowance. But I don’t agree that this resulted in a financial loss. Ms C didn’t proceed with the withdrawal in the following tax year, so she didn’t pay any additional tax as a result. Instead, Ms C suffered a loss of opportunity to benefit from her full personal allowance and in my view, this is remedied by way of a payment to recognise the distress and inconvenience this caused. Overall, I think a sum of £400 fairly compensates her for this. I appreciate that Ms C disagrees about this, but I’m satisfied this sum is reasonable in the circumstances. I accept Ms C cancelled the withdrawal due to take place in the 2020/2021 financial year because of her experience with Mr T. While I understand Ms C’s motivations for doing so, she decided on this course of action herself. Furthermore, Ms C cancelled the withdrawal in May 2020, but she still had until March 2021 to make this withdrawal if she still wanted to go ahead with it. As such, I don’t think Ascot Lloyd is responsible for any loss of her personal allowance in this year. The review that took place in 2024 and the withdrawal request As I’ve said above, I think Ms C’s ongoing advice contract with Ascot Lloyd ought to have been terminated in 2020. As such, she shouldn’t have been charged OACs for the review in 2024, so they should also be refunded in the same manner as I’ve recommended those charged in 2021, 2022 and 2023 should be refunded. Regarding the withdrawal request, I'm aware that the SIPP Ms C holds is an adviser-led product, meaning that even if the advice contract had been terminated, Ms C would've still needed to have Ascot Lloyd attached to her SIPP. She therefore would've needed to contact Ascot Lloyd so that it could arrange the income withdrawal, rather than it being something she could’ve actioned herself. I've considered whether there were delays in the process Ascot Lloyd followed when Ms C made her withdrawal request. Based on the evidence I've seen, this is what happened: • Ms C contacted Ascot Lloyd by phone on 8 March 2024 as she wanted to make an income withdrawal request. • Ms C had a telephone conversation with the adviser on 11 March 2024 and a meeting was arranged on 14 March 2024. • A meeting took place in Ascot Lloyd’s office on 14 March 2024 and Ms C signed the necessary forms for the withdrawal to proceed.

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• A further conversation took place on 15 March 2024, where I understand that the adviser (according to his file note of 19 March 2024) confirmed Ms C understood the consequences of her actions and understood the risks. • Ms C also sent an email following this conversation on 15 March 2024 confirming her intention to proceed. I understand that the SIPP provider's cut off time for receiving withdrawals requests before the end of the financial year was 5pm on 20 March 2024. I appreciate that 15 March 2024 was a Friday and 20 March 2024 was a Wednesday. But I still think Ascot Lloyd had three full working days to pass the income withdrawal request to the SIPP provider. This was a simple administrative process and Ms Ascot had signed the forms necessary to proceed on 14 March 2024. As such, based on the timing of events set out above, I see no reason why the SIPP provider should not have received Ms C's withdrawal request before the cut-off time so that her income withdrawal request could be processed in the current financial year. It's evident that Ms C reversed the income withdrawal once she realised that it had been processed in the new financial year. As such, despite what Ms C has said about this, I’m satisfied she hasn’t suffered an actual financial loss, only a loss of opportunity to receive income and pay a lower rate of tax. But I think that this clearly caused her significant distress and inconvenience, not least because she needed to contact various parties in order to reverse the income withdrawal so as to avoid becoming a higher rate tax-payer in the new financial year. Overall, I think that Ascot Lloyd should pay Ms C £500 to compensate her for this. This means that I’m requiring Ascot Lloyd to pay Ms C a total of £900 for the distress and inconvenience caused as a result of Ascot Lloyd failing to process her income withdrawal requests in time in 2020 and 2024. Ascot Lloyd may consider that it should be able to charge Ms C a fee for having processed her income withdrawal request in 2024, given that it would’ve been entitled to charge a fee for this work if no ongoing advice contract was in place. But on balance, I don't think it is fair for Ascot Lloyd to make any allowance for the fee it would have charged Ms C to process the withdrawal request on an execution-only basis. In my view, Ascot Lloyd failed to deliver the service and Ms C ultimately had to reverse the transaction. So, I don't think it would be fair or reasonable to charge a fee for this in the circumstances. Putting things right Ascot Lloyd should refund the OACs Ms C paid for the reviews she was due to have in the years 2021, 2022, 2023 and 2024, together with a return on those fees had they remained invested. Ascot Lloyd should: • Calculate the loss in value of Ms C’s pension due to the deduction of the OACs taken over the period stated above. This will mean calculating the lost investment returns on each advice fee from the date the fees were deducted to the date of settlement. • Ascot Lloyd should pay this compensation into Ms C’s pension plan, to increase its value by the amount of the compensation any additional interest. The payment should allow for the effect of charges and any available tax relief. Ascot Lloyd shouldn’t pay the compensation into the pension plan if it conflicts with any existing protection or allowance.

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• If Ascot Lloyd is unable to pay the compensation into Ms C’s pension plan, it should pay that amount direct to her. But had it been possible to pay into the plan, it would have provided a taxable income. Therefore, the compensation should be reduced to notionally allow for any income tax that would otherwise have been paid. This is an adjustment to ensure the compensation is a fair amount – it isn’t a payment of tax to HMRC, so Ms C won’t be able to reclaim any of the reduction after compensation is paid. • The notional allowance should be calculated using Ms C’s actual marginal rate of tax at retirement. Based on the evidence provided in this case, Ms C has retired and she is a basic rate tax-payer, so the reduction would equal 20%. Ms C has confirmed that she has already taken her full tax-free lump sum. Ascot Lloyd must provide the details of the calculation to Ms C in a clear, simple format. Ascot Lloyd must pay the compensation within 28 calendar days of the date on which we tell it Ms C accepts my final decision. If Ascot Lloyd fails to pay the compensation by this date, it should pay 8% simple interest per year on the loss, for the period following the deadline to the date of settlement. Ascot Lloyd must also pay Ms C a total of £900 in recognition of the distress and inconvenience caused to her by her advisers not following her withdrawal instructions before the end of each financial year in 2020 and 2024. My final decision I’m upholding this complaint and I require Ascot Lloyd Limited to pay compensation to Ms C as set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Ms C to accept or reject my decision before 3 April 2026. Hannah Wise Ombudsman

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