St James's Place Wealth Management Plc · DRN-5831049

The complaint Mr B, with the assistance of a professional representative, complains he was given unsuitable advice by St James’s Place Wealth Management Plc (“SJP”) to transfer three personal pensions to an SJP Retirement Account. The switch caused him a financial loss as the charges in the new plan were higher, the funds weren’t invested in line with his attitude to risk, and he should’ve been told to seek independent financial advice. For ease of reading, I’ll attribute any submissions or comments made by the professional representative as being from Mr B. What happened The background to the complaint was set out comprehensively by the investigator in his view, so I won’t replicate it all here. Essentially Mr B had lost touch with his previous financial adviser, so in early 2013 he met an adviser who was an appointed representative of SJP to review his pension provision. The adviser gathered information about Mr B’s personal and financial circumstances as follows: • He was aged 48, married with grown up children; • He was working as the controlling director of two companies, earning around £50,000 from a combination of salary and dividends; • He was currently a higher rate taxpayer, but envisaged reducing to basic rate in the future; • He had three “paid up” personal pensions, two with provider Z and a “With Profits” plan with provider P. • He owned his home with an interest only mortgage, but it was being marketed in order to downsize and repay the borrowing; • He believed a realistic retirement age was 65 and didn’t have a specific income in mind. It was recorded that Mr B was aware the charges for the Z and P plans were relatively low, but thought consolidating his plans and having them better managed would improve the growth prospects. It was also noted Mr B was aware of and was comfortable with the charges for the SJP plan. The report discussed the alternatives to replacing Mr B’s plans, but discounted leaving them as they were, or switching funds. So the recommendation was to consolidate the three plans into an SJP Retirement Plan, invested in its Managed Funds portfolio, in line with his attitude to risk which had been agreed as “medium”. The plan came with an annual management charge of 1.25% and fund charges of between 0.30% to 0.85%. The adviser offered regular reviews every six months, so Mr B agreed to SJP’s ongoing advice service for which he’d be charged 0.25% of the plan value. The

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suitability report explained the new plan would cost 1% more than P and 0.70% more than Z, but the adviser felt achieving the necessary additional growth of 0.9% overall was realistic. As Mr B’s company had too few employees to require auto-enrolment, he didn’t have access to a workplace plan. So the adviser recommended he maximise his pension contributions to benefit from tax relief, particularly being a higher rate taxpayer. In March 2013 Mr B signed indicating he accepted the advice, and the plans totalling just over £100,039 were transferred from Z and P to the SJP retirement account. Mr B had regular reviews with the adviser over the years, but no significant changes were made to his plan or the investment strategy. In 2018 Mr B’s SJP partner changed, and in 2019, Mr B wanted to release funds from his SJP plan to complete a new build property enabling him to downsize and repay the mortgage. SJP recommended he crystallise the plan in full, release the 25% tax free lump sum of around £43,000 which would meet his needs. And the remainder in flexi-access drawdown plan invested in line with his ATR which was confirmed as “medium”. Mr B had several further annual reviews, the last one being in December 2024. Mr B, via his professional representative, complained to SJP in January 2025, about the suitability of the original advice and that the promised annual reviews hadn’t taken place every year. SJP responded in March 2025 but didn’t uphold either point. They said the advice given in 2013 had been suitable, as it had met Mr B’s objectives. And in relation to the ongoing advice, SJP said Mr B had complained too late about any reviews which should have happened prior to 2018. But they were satisfied reviews had taken place every year from 2019, so they didn’t agree to refund the ongoing advice charges for those. Mr B referred his complaint to this service where it was considered by one of our investigators. Having looked at the evidence, he was satisfied that since 2014 reviews had taken place each year except for 2017. But he agreed with SJP that Mr B was too late to complain about reviews which should’ve happened prior to 2018, being more than six years before Mr B raised his complaint. So he said the reviews prior to 2018 were out of time, and since then annual reviews had taken place in line with the agreement, so he didn’t uphold that element of the complaint. In terms of the advice itself, the investigator didn’t think the advice had been unsuitable for Mr B. SJP’s charges were higher than the original plans, but the additional growth needed was only 0.9%, which was well within the regulator’s range of projections at the time. The fund choice appeared to match Mr B’s “medium” attitude to risk, and Mr B had agreed to pay for ongoing advice to ensure his pension provision was on track, a service not available had he remained with his previous providers. The suitability report showed that remaining with his previous providers but switching funds had been discussed but wasn’t something Mr B could’ve done on his own. And he was satisfied the SJP partners hadn’t misrepresented their position as restricted advisers. Overall the investigator felt the consolidation, better performance prospects and the benefit of ongoing advice did fit with Mr B’s objectives, so he didn’t uphold that point either. SJP accepted the investigator’s view and had no comments to add. Having been provided with evidence to show annual reviews had taken place each year since 2018, Mr B didn’t wish to take the complaint about that any further. But he didn’t agree with the investigator’s assessment about the suitability of the advice to switch plans, making the following points (in summary):

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• SJP had made an incorrect assumption that his risk profile was “medium” and there should have been significantly more investigation into his “true” attitude to risk; • There was no good reason to move, but no consideration had been given to staying with his existing plans; • There’s no evidence moving to SJP was of particular benefit to him, if his existing plans needed to be rebalanced in line with his attitude to risk, he could’ve switched funds, with the assistance of an independent financial adviser (“IFA”); • Having lost touch with his previous adviser he’d been seeking a new IFA, he didn’t want a tied adviser; • He acknowledged that any advice would incur a cost, but it would be cheaper than SJP; • Being 17 years away from retirement at the time of the original advice he’d had no real need for ongoing advice, and the charges these involved. • The only significant input from the SJP adviser wasn’t until 2019 when he moved into drawdown; • So he wanted an ombudsman to review his case, and referred to a couple of previous decisions which he said supported his position. The investigator considered Mr B’s points, but they didn’t make him think SJP’s advice had been unsuitable, or that Mr B had been in an uninformed position. He said Mr B had been selective about the decisions he quoted which relate to specific cases, each of which is considered on its own facts and merits. So the case has come to me to decide. 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. Having done so I’ve come to the same outcome as the investigator for broadly the same reasons. Let me explain why. In considering Mr B’s complaint I’ve taken into account relevant law and regulations, including regulatory rules, guidance and standards, codes of practice and (where appropriate) what I consider to have been good industry practice at the relevant time. Mr B has complained about the advice he was given to switch his pension plans to SJP, and that having done so SJP didn’t provide the annual reviews he was being charged OACs for. I’ll deal with the second issue first. Ongoing advice and regular reviews The investigator was satisfied SJP had provided Mr B with annual reviews every year, apart from 2017 which he couldn’t evidence. As Mr B didn’t complain until January 2025, he’s accepted the position set out in the investigator’s view that in accordance with the Financial Conduct Authority (“FCA”) rules which govern this service he has complained too late about whether he received reviews between 2014 and 2018. DISP 2.8.2 says a complaint must be made within six years of the “event” being complained about, or (if later) within three years of when the consumer knew, or ought reasonably to have known he had cause to complain. Mr B knew from the outset he was paying OACs, and that these entitled him to annual reviews, in fact the first adviser (Mr H) offered six-monthly reviews. Annual reviews are due around the anniversary of his plan, so if one didn’t take place in a particular year Mr B

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would’ve known he had cause to complain about it that year. For the 2017 review which the investigator identified as possibly being missed, the six years for Mr B to complain expired in 2023, and he doesn’t gain any more time to complain under the three-year element of the rule. And he’s not asked us to consider any exceptional circumstances which prevented him complaining sooner. Mr B has also accepted the evidence from the investigator to show annual reviews took place every year since 2018 so that element of his complaint falls away, meaning I don’t need to deal with his complaint about OACs further. Suitability of SJP’s advice To be clear, my role here isn’t to decide what would’ve been the best or most perfect advice for Mr B, or any consumer. I’ll look at the advice and the recommendations given by SJP and decide whether it was appropriate for Mr B’s needs and objectives at the time, taking account of his personal and financial circumstances. There may have been other options available to Mr B at the time of the advice, but I’ll focus on the advice he actually accepted and assess the suitability of that. SJP considers its customers value its particular approach to investment management, whereby its investment committee selects from a range of funds and investment managers, guided by a firm of independent investment consultants (Stamford Associates). The Suitability Report said Mr B was “attracted to the SJP approach to investment management” and felt it offered “greater potential for long-term capital growth” than his current providers. I’m not sure this was the deciding factor in Mr B becoming a client of SJP, and I’ve not seen anything to show how SJP’s Managed Funds Portfolio performed compared to Mr B’s existing plans on which he could base a conclusion about superior performance. But as Mr B proactively sought an adviser, I think he was interested in having his retirement provision professionally assessed to ensure it was on track. And that he would’ve valued having it reviewed on a regular basis with the ability to make any changes necessary in line with his circumstances, which he couldn’t do without an adviser. As a regulated firm, SJP was obliged to adhere to a number of regulatory rules and standards when advising Mr B, namely the Conduct of Business Sourcebook (COBS) and Principles for Businesses (PRIN) sections of the FCA handbook. And as Mr B’s representatives have pointed out, of particular relevance for this complaint is the report the Financial Services Authority (the regulator at the time) published in 2009 on the quality of advice on pension switching. This report identified four main areas of concern: • The switch involved extra product costs without good reason. • The fund(s) recommended were not suitable for the customer’s attitude to risk and personal circumstances. • The adviser failed to explain the need for or put in place ongoing reviews when these were necessary. • The switch involved loss of benefits from the ceding scheme without good reason (not relevant here). And then in 2012 as part of wider guidance around assessing suitability, the regulator revisited this topic, having concerns advisers were: • Failing to consider the impact and suitability of additional charges, either by not considering the costs of the existing scheme or not making a comparison of those with the new one in a way the client was likely to understand. • Recommending switches based on improved performance prospects but providing no supporting evidence to show that these performance prospects were likely to be achieved.

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• Failing to collect adequate information on the existing investment or to consider the features and funds available within the existing scheme. In 2016 the FCA published guidance on its website for “assessing suitability”. The guidance said that when undertaking replacement business, firms need to ensure they: • consider objectively your clients’ needs and objectives; • collect necessary information on your clients’ existing investments and the recommended new investments, such as the product features, tax status, costs and • the performance of the underlying investments; • implement a robust risk-management system to mitigate the risk of unsuitable advice and poor client outcomes. Although the original advice to Mr B in 2013 predated the 2016 guidance, it didn’t change the rules SJP was obliged to follow when considering replacement business. The FCA said it simply served as a reminder to firms of the standards which were already in place. In terms of SJP’s obligations, I’d expect the adviser to gather sufficient information to assess Mr B’s knowledge and experience in investing, his financial situation and objectives, plus other considerations such as his attitude to risk, time horizon to retirement, and other pertinent information about his circumstances. I can see the adviser completed a fact find, capturing information about Mr B’s earnings, outgoings, mortgage borrowing, pensions etc, at the initial meeting in 2013, and this information was updated at review meetings with the adviser over the years, the last one in 2024. The adviser also obtained information about Mr B’s pension plans with providers Z and P. SJP explained that Mr B could leave his plans where they were. But although he was 17 years away from his intended retirement, Mr B was clearly starting to think more about the future and maximising his pension, otherwise I think he wouldn’t have sought out a new adviser. Consolidating his three plans was a reasonable objective, as having all his funds in one place would make monitoring its performance more straightforward, and offer greater ease and flexibility when it came to taking benefits. It also allowed SJP to ensure Mr B’s pension funds were all invested in a way that matched his attitude to investment risk, as the Z and P plans were invested quite differently. So, I think recommending that all Mr B’s existing pensions were brought into one plan was likely to be suitable for him. The FCA guidance doesn’t prevent an adviser from recommending a switch to a plan with more expensive charges. But any recommendation must ensure the switch was for a good reason and that this was communicated in a way which is clear, fair and not misleading. The suitability report issued in March 2013 made clear the Z and P plans all had lower charges than SJP, so to ensure Mr B understood the implications the report set out both the necessary percentage growth (0.9%), and the monetary amount the plan would need to grow by to cover the increased charges. At the time the potential growth rates were in a range from 5% to 9%, and the impact of charges would reduce the mid-range growth by 1.8% from 7% to 5.2%, which doesn’t appear unreasonable based on investments in line with Mr B’s medium ATR. As well as the higher charges, the report set out the potential disadvantages of replacing Mr B’s existing plans. These were that he’d lose the benefit of “smoothing” and any future bonuses by leaving the P “With Profits” plan, provider Z offered a wider range of funds, and that withdrawals from his SJP plan would be subject to an early withdrawal charge in the first six years from inception. So I think Mr B was given the information he needed to make an informed decision.

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The impact of SJP’s charges was included in the illustration Mr B was given, which set out the potential value at various points over the life of the plan, comparing the value with no charges, only product charges and all charges. And an appendix to the suitability report included a comparison of the different plans set out in table form for clarity. And of course, for the additional cost he was paying, Mr B was receiving an additional service, as he hadn’t previously been receiving ongoing advice. Having accepted that annual reviews did actually take place throughout, Mr B now says that because the adviser made minimal changes to his plan over the years having ongoing advice was of little benefit to him. But I can see from the letters which followed each of the reviews, the adviser updated Mr B’s financial and personal circumstances on a regular basis, and as well as reviewing the performance of his SJP retirement account the adviser discussed various other matters with Mr B, which I think were helpful to him. These included suggesting he make regular and lump sum contributions to his plan to benefit from the tax relief. When Mr B needed to raise funds to complete a new-build property in order to downsize, the adviser discussed the various ways this could be financed, including extending his mortgage, as well as accessing the tax-free lump sum from his pension and moving the balance to flexi-access drawdown. And after 2019 when the plan was in drawdown, the adviser checked when Mr B might want to retire and start taking income. I’ve seen evidence his ATR was reviewed regularly and each time it was assessed as “medium”, which meant no changes were made to the way his plan was invested. But unless Mr B’s circumstances or objectives changed significantly over the period the adviser simply had to confirm the investments remained suitable. And if no changes were necessary that doesn’t mean the reviews were pointless. Mr B considers SJP didn’t properly assess his ATR, although he hasn’t really explained why he thinks this, or what his “true” ATR should have been if the adviser’s assessment of “medium” isn’t how he considers himself. I’ve not seen the process by which SJP assesses ATR, but the 2013 suitability report includes a paragraph which states that Mr B’s ATR and capacity for loss were discussed, using SJP’s brochure “Understanding the balance between risk and reward”. The report states that Mr B “confirmed [he was] a medium risk investor on [SJP’s] risk spectrum”. This is described as wanting his capital to keep pace with inflation and being comfortable with it being invested in a range of investments including equities and property. If Mr B disagreed with SJP’s assessment of his ATR I’d have expected him to raise it on receipt of the report, or during an annual review. Mr B seems to assume that had he remained with his existing plans they would’ve needed to be rebalanced, which suggests he didn’t think those plans were invested in line with his ATR either. My role isn’t to replace the adviser’s assessment with my own, but as Mr B had a 17 year time horizon to retirement and had no workplace pension to rely on, I think he wasn’t yet on the flightpath to derisk into more cautious funds, and would’ve been prepared to take some risk, but not excessive risk in order to benefit from the potential of higher growth. So in the absence of any evidence it was incorrectly assessed, I think it’s reasonable to say Mr B’s ATR was medium or balanced and remained so over the period. Mr B also considers he would’ve been better off consulting an independent financial adviser (“IFA”) rather than an SJP tied adviser who could only recommend SJP’s products and services. Despite me asking, Mr B hasn’t explained how his relationship with SJP came about. But as far as I can tell, he approached the SJP partner (Mr H) as he wanted to review his retirement provision, having lost touch with his previous adviser. This suggests he had some experience of financial advice and valued their professional expertise. And although he was some years away from his selected retirement age of 65, it was reasonable to take steps to maximise the growth of his pension, particularly as he didn’t have access to a workplace scheme.

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The FCA describes financial advice as either independent or restricted. If firms only give advice on certain types of products, or on products from a limited number of providers, they must describe their advice as restricted. Mr B’s adviser was an appointed representative of SJP, (referred to as SJP “partners”). SJP partners are tied advisers providing restricted advice, as they only recommend SJP’s products and services. A tied adviser must be transparent, in disclosing to the customer the capacity in which they operate, and the limitations of the service they provide. I don’t consider it reasonable to expect that if a consumer like Mr B gets in touch with SJP the adviser should suggest he consult an IFA. I’ve seen nothing which makes me think either of Mr B’s SJP partners misrepresented themselves or gave Mr B the impression he had engaged an IFA. I’m satisfied the literature Mr B was given makes clear they represent only SJP, and the Key Facts document explained in Section 2 that he was being provided with “Restricted Advice” (the other options were independent advice or no advice). And under “Scope of Authority” it reads “Members of the St James’s Place Partnership are authorised to only represent the St James’s Place Group for the purposes of advising solely on the wealth management products and services available from companies within the Group”. As far as I can tell from the correspondence issued following the annual reviews, the adviser’s tied status wasn’t raised as an issue in any of those review meetings which Mr B appears to have engaged with. As explained earlier I’m not required to determine what would’ve been best advice for Mr B. Had he consulted an IFA I’d expect them to have conducted a similar fact-finding exercise of Mr B’s financial and personal circumstances, assessed his attitude to risk, reviewed the performance of his existing plans, and switched funds or recommended a new product if appropriate. But it’s not possible to say what changes would’ve been made, if any, what the cost would’ve been or the impact on performance. The risk rating of the two Z plans isn’t stated, but one was invested in three funds (equities, European and managed) and the other in one managed fund, whereas the P plan, (which was the second largest of the three) was invested in the “With Profits” fund which is generally considered to be relatively low risk, so arguably taken together they may suit a balanced investor. The With Profits fund grows by way of discretionary bonuses, with the final bonus only estimated until benefits are taken. P apparently would allow fund switches, but it’s not possible to say if one would’ve been recommended, given a Market Value Reduction may be applied if moving from With Profits to unit-linked funds. Mr B acknowledges he’d still have been charged for advice from an IFA but thinks the cost may be lower than SJP. If an IFA had advised Mr B to remain with his existing plans, being paid up they likely wouldn’t support charges being deducted, so Mr B would have to pay the initial advice fee and ongoing charges in cash rather than being deducted from the fund value. Plus those plans wouldn’t have supported drawdown, so Mr B would still have needed to switch to a new product in 2019 in order to release the tax-free lump sum to complete his new house, and the advice fee for that would be based on 2019 rather than 2013 valuations. And in any case, I’ve already established Mr B had reviews with the SJP adviser at least annually, and I’ve seen nothing to suggest he was dissatisfied, or queried the adviser’s tied status until his complaint in 2025. I think Mr B couldn’t have been entirely satisfied with the performance of his existing plans, and must’ve considered he’d benefit from financial advice, otherwise he wouldn’t have proactively sought advice from SJP. I’ve seen no evidence the adviser being independent was a priority for him, and I’m satisfied the SJP partner was clear about his status as a tied adviser. The regulator expects that where the recommendation is to switch to a more expensive product there must be a good reason to do so. Consolidating Mr B’s pensions into one place and investing them in line with his ATR appears to have met his objectives, and I’ve seen no evidence to suggest his ATR was assessed incorrectly. Having regular reviews with a financial adviser was likely to be useful to him, and while SJP’s charges were higher than the

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ceding plans, they were set out clearly and transparently to enable Mr B to make an informed decision, and they entitled him to the ongoing advice he required. Leaving the remaining funds invested in a drawdown plan having released the tax-free lump sum, wouldn’t have been possible with his existing plans, so he’d have needed a new product anyway. Mr B engaged with the reviews throughout and doesn’t appear to have expressed any reservations or dissatisfaction prior to his complaint in 2025. Taking everything into account I don’t consider SJP’s advice was unsuitable, so I don’t uphold this complaint or require SJP to do anything to put things right. My final decision I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 16 April 2026. Sarah Milne Ombudsman

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