Quilter Financial Services Limited · DRN-5952203

The complaint Mr W through a professional representative complains that the ongoing service agreement was not explained in full prior to accepting the service, in addition he says Quilter Financial Services Limited (Quilter) did not provide the service he was paying for and as his investments were not reviewed, he suffered consequential loss. What happened Our investigator set out the background to the complaint in his letter of recommendation, for ease of reference I have included an amended copy below: ‘Mr W met with Quilter in September 2017, he was aged 52, employed and looking to retire at age 67, at this meeting he signed an authority to proceed document to say he had received Quilters Terms of Business, Guide To our Services and About our Ongoing Advice booklet. Additionally, he signed to accept that he would pay Quilter 1% a year for ongoing advice. An attitude to risk (ATR) report dated 14 September 2017 confirmed Mr W was a moderate investor and this was confirmed in the suitability letter dated 5 October 2017 when Quilter recommended Mr W transfer his Scottish Widows pension to an Old Mutual Wealth (OMW) Retirement Account and invest in the Cirilium Moderate fund as this was in line with his ATR. The suitability letter issued at the time set out the expectation for annual reviews, it said: ‘REGULAR REVIEW SERVICE At Llew Financial Services we strongly recommend that your plan is reviewed on a regular basis. Typically, our annual review will comprise the following services: ￿ An assessment and review of investment performance and markets relative to your ￿ specific pension investment as well as a wider economic overview ￿ A review and appraisal of prevailing interest rates and annuity rate movements as may be applicable to your circumstances at that time ￿ A summary of the impact of any legislative or statutory changes that might impact on your retirement strategy, for example, changes in taxation law or State pension benefits and applicable qualifying rules ￿ An update and appraisal of your financial and personal situation, needs, circumstances and objectives ￿ A review of your attitude toward investment risk and volatility linked specifically to the performance of your pension funds, to ensure continued appropriateness. This will help ensure that your risk tolerance continues to match the asset allocation model adopted the choice of investment funds being used. The costs of the Regular Review Service will also be met by way of a deduction from your pension fund. For the services described above, an annual charge of 1% will be deducted each year. You should note that the rate is charged as a percentage of your pension funds’

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value and as such the actual amounts payable will vary as the value of your pension fund fluctuates. Please refer to your illustration for full details. In the event that I am not available to carry out the reviews with you, please contact Llew Financial Services who will arrange for an alternative adviser to carry out the review with you.’ I understand from previous complaints involving Quilter the About our Ongoing Advice booklet is a seven page document and I can see one of the stated aims of this document was to help Mr W decide the most appropriate style and frequency of the ongoing advice. A review was held on 2 November 2018 at Mr W’s new home, the fact find was updated, Mr W signed another Authority to Proceed document to say again he had been provided with Quilters Terms of Business, Guide To our Services and About our Ongoing Advice booklet. Additionally, Mr W signed to say he would like to continue with ongoing advice. To evidence what was discussed Quilter sent Mr W his annual review report and this covered his circumstances, objectives, ATR and fund performance. Mr W met with Quilter on 20 November 2019 for his annual review, he signed the Authority to Proceed and re-visited his ATR which confirmed he was again a moderate investor and this was confirmed to him with a ATR report dated 20 November 2019. Furthermore Quilter sent Mr W his annual review report and this covered his circumstances, objectives, ATR and fund performance, as they had the year previously. The review letters sent in 2018 and 2019 both gave recommendations going forward and reaffirmed that the regular review service was paid for by a deduction from the OMW pension as an annual charge paid yearly. On 7 April 2020, Quilter received notification from OMW that Mr W had transferred the servicing rights to a new advisor and as such Quilter would no longer have any obligation to offer annual reviews. Mr W complained via his representative on 19 November 2024, in addition to the above complaint points the complaint stated Quilter failed to carry out an assessment of his ATR and charged excessive exit fees. Quilter responded on 14 May 2025, they concluded that Mr W was made fully aware of the ongoing service in 2017, All annual reviews were completed which included his risk profile and there is no evidence of an exit fee.’ The investigator looked in matters but didn’t find that Quilter had done anything wrong. He said it had carried out all the reviews required and Mr W was invested in line with his attitude to risk – and it had set everything out clearly. He said Mr W had cancelled the arrangement after the yearly fee had been taken in 2020 but before the review was due to be carried out. But the investigator concluded he had no reason to believe Quilter wouldn’t have carried out that review. He didn’t think any refund should be due. Mr W’s representatives didn’t agree they said: ‘Quilter apply the process of charging for a review in advance. However, if the review is ultimately not provided, our client should not be charged. In effect, if you pay a year’s road tax, you would be refunded for any amount unused and only be charged for the period you gained the benefit. That way, you only pay for what you receive. Quilter may not be at fault if the client closes their account, but that should not mean they are

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entitled to retain funds for a service not provided just because the client has chosen to leave and also because they choose to charge in advance. Unless you are able to provide evidence in the POS documents to show that it was made clear that should they leave, they would not be entitled to a refund on sums already paid, it is our belief that the period for 2020 which has been charged should be refunded.’ Our investigator said in response: The FCA issued a publication on 25 February 2025 the important point for this complaint is "Where a firm has been ready, willing and able to provide suitability reviews, but a client has consciously declined the service in any given year, we consider it less likely that redress will need to be paid". I consider that based on the past evidence of reviews been carried out by Quilter that if ongoing advice had not been transferred to a new servicing advisor then Quilter would have been willing to offer and complete a review, as such I don't find that Quilter have done anything wrong here or do they need to refund any ongoing servicing fees. By transferring to a new advisor Mr W has declined Quilter the opportunity to provide a review for 2020. From my experience nearly all firms charge for a review in advance and that is how ongoing advice fees work, in reference to the comparison to road tax, you are not refunded any unused amount if you cancel it you are still charged for the full month the cancellation took place or to put it another way if you decided not to use you car for three months and then cancelled the road tax you can not reclaim any tax you paid when not using your car. A different comparison is joining a gym, if the gym is open and able to offer the service that it is been paid for and a customer chose not use it then they would not be able to cancel and claim a refund for the months they never went. Mr W’s representatives still didn’t agree and said: 1. Firstly, our client did not “decline Quilter the opportunity to provide a review for 2020”, he transferred his funds at a point in time when the review had not as yet been offered and he chose to leave Quilter, as is his right. 2. In regards to the road tax example, you are befitting from road tax cover whilst you have a relevant vehicle. You are paying for the tax every day that you hold the tax. You are then refunded for any days that you don’t hold the car thereafter. When the review takes place, that is the point in time that you receive the service you are paying for. If and meeting is arranged prior to the annual review, that could of course be considered as acceptable as the review depending on its nature. It is the onus of the advisor to contact the client at some point/s to arrange the review. 3. Whilst Quilter may have been ready and willing to offer the review, an assumption only, they did not actually offer the review. The client can only decline the offer of review if the offer is made. We would ask you to refer to the Financial Ombudsman Case reference redacted in which the Ombudsman decided in favour of the complainant. Please refer to page 3 “he referred to the regulator’s Conduct of Business Sourcebook (‘COBS’) rules, at COBS

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6.1A.22 R, and the regulator’s guidance factsheet on OACs which, he said, combined to expect a firm not to merely offer suitability reviews but to ensure they were delivered. For these reasons, he concluded that the complaint about the OACs should be upheld” Please also refer to page 11 “, I echo and endorse the investigator’s reference to the regulatory expectation that a service like the OAS should be delivered, not merely offered, where it is being paid for.” Whilst I understand that each is considered independently, so are many similar legal matters in court, but they still have to follow reasonable guidelines and apply reasonable consistency, otherwise every individual case handler could make up their own guidelines without due consideration. The investigator wasn’t persuaded to change his view, so the case was referred for a final decision. 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. And having done so I agree with our investigator and for broadly the same reasons. I’ve looked at the agreement and whilst the annual fee is paid in advance, there is no scope within the agreement for refunds. It just says ‘As outlined above, payment for the review service offered will be received by Llew Financial Services for the foreseeable future from Old Mutual Wealth. If however you no longer wish to receive the review service you are at liberty to cancel this charge at any time and can do so by contacting the provider directly and confirming your wish for this payment to cease. Please be aware that should you do so I will no longer be in a position to review your affairs as agreed.’ So I don’t think Mr W was due a refund or had a reasonable expectation that a refund would be paid when he cancelled the service based on this. With regards to the regulator’s guidance, I agree with the investigator that by cancelling the ongoing agreement, Mr W has in essence declined to have the review. He would have been aware the reviews were being carried out each year, aware that he was paying in advance for the reviews and that when he cancelled the annual review hadn’t yet occurred. And I think had he not chosen to cancel the arrangement early in the year, I think Quilter would have offered to carry out the review – as they did in previous years. Our cases are decided on their own merit and circumstances, that said I have looked at the point Mr W’s advisers have made regarding another case. However, the FCA has since provided further clarification https://www.fca.org.uk/publications/multi-firm-reviews/ongoing- financial-advice-services which as the investigator set out, said ‘Where a firm has been ready, willing and able to provide suitability reviews, but a client has consciously declined the service in any given year, we consider it less likely that redress will need to be paid.’ Whilst this circumstance doesn’t fit the guidance exactly, all things considered I don’t think Quilter did anything wrong and the reason the review wasn’t carried out was due to Mr W’s actions and not Quilters.

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My final decision I do not uphold this complaint and make no award. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr W to accept or reject my decision before 20 April 2026. Simon Hollingshead Ombudsman

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