Adviser: Possible Complaint

Groover24

BACKGROUND
I had a few IFA over the years and the last IFA until 2022 when he retired and he assure me that he would arrange on-going advice with a new adviser with no cost to me (He was a one-man band). Great! Met the new guy and all was good until end of January this year when it dawned on me that the adviser is restricted and not independent - I was researching the worth of transferring some of my DC company pot when all this came to light. I was not told of this is a 100% clear fashion.

Needless to say the new (current) adviser is SJP. I was sold lower charges and better return that my then pension fund - the latter seems to be true although not the charges!

I have subsequently talked to a few IFA who advise a move away taking a hit on the exit fee - one will not charge a few to move to them as they could not justify the cost on top oif the exit fee. The others want a percentage but it all adds up.

One discussion I had the IFA asked about a suitability report from SJP. I do not remember seeing one or actually receiving one, so I asked for it. I can honsestly say that I did not receive this and I have a folder for all financial papers which I checked. Some of the reading is not what I would have signed up for especially when it states higher charges and limited funds compared to the scheme I left.

QUESTION
Based on the above background I feel a complaint about:

1. The lack of clarity that the new adviser is NOT independent
2. The lack of a suitability report until requested

I would assume that I need to compain to the SJP partner first (or would SJP head office be better) before the FCA? I would like to get out of the scheme without any charge if at all possible.

Any thoughts, opions, or advice in the is would be greatly received

dunstonh

Needless to say the new (current) adviser is SJP. I was sold lower charges and better return that my then pension fund - the latter seems to be true although not the charges!

Be careful of comparing performance.  For example, increasing the amount in equities compared to what you have would push the past performance figure up.    So, sales reps often do that to make theirs look better.  

I have subsequently talked to a few IFA who advise a move away taking a hit on the exit fee - one will not charge a few to move to them as they could not justify the cost on top oif the exit fee. The others want a percentage but it all adds up.

I always find its worth taking the hit on the exit charge as the ongoing costs are usually better than half.   So, it recovers the exit charge.   However, it would depend on the chosen provider/platform, investments and adviser charge.

QUESTION
Based on the above background I feel a complaint about:

1. The lack of clarity that the new adviser is NOT independent
2. The lack of a suitability report until requested

Yes on both.  it is mandatory on new business to issue a suitability report.   With pension switching, in particular, there are a range of requirements to be included in the report.  Charges comparisons being a key one.

At the first meeting (or as soon as possible), you should have been issue with a terms of business.     These should state the adviser status and its a requirement for the adviser to confirm their status and not just hide it in pages of text.

I would assume that I need to compain to the SJP partner first (or would SJP head office be better) before the FCA? I would like to get out of the scheme without any charge if at all possible.

You never go to the FCA. That is not their role.
Complain directly to SJP and set out your demands to put it right.

Groover24

Complain directly to SJP and set out your demands to put it right.

Would that be the SJP partner or the head office? I suspect head office would be a better bet?

Needless to say the new (current) adviser is SJP. I was sold lower charges and better return that my then pension fund - the latter seems to be true although not the charges!

Be careful of comparing performance.  For example, increasing the amount in equities compared to what you have would push the past performance figure up.    So, sales reps often do that to make theirs look better.  

This I based on current performance (last few months / year) but I do think there is more in equities. One comment from one adviser is that the SJP plan is too much in one fund if it takes a hit

At the first meeting (or as soon as possible), you should have been issue with a terms of business.     These should state the adviser status and its a requirement for the adviser to confirm their status and not just hide it in pages of text.

A lot of the information was verbal with numbers and graphs on paper that the adviser illustrated - no official documents until I have just asked (late in the day!)

QUESTION
Based on the above background I feel a complaint about:

1. The lack of clarity that the new adviser is NOT independent
2. The lack of a suitability report until requested

Yes on both.  it is mandatory on new business to issue a suitability report.   With pension switching, in particular, there are a range of requirements to be included in the report.  Charges comparisons being a key one.

I will have to revisit the suitability report as I do not think it compares charges other than to state the SJP are higher

dunstonh

Would that be the SJP partner or the head office? I suspect head office would be a better bet?

Direct to SJP's complaint department.  Not the sales rep. The sales rep would have to forward it to them anyway.

This I based on current performance (last few months / year) but I do think there is more in equities. One comment from one adviser is that the SJP plan is too much in one fund if it takes a hit

Equities have boomed since October 2023 after 18 months of nothingness.  Bonds are down after 7 years but did bounce a bit in the final 3 months of 2023.

Comparisons using different time periods means nothing.   One time period was negative.  One was bumper growth.

Groover24

I have a meeting with the SJP adviser / sales rep next week as he seemed to be a little upset that I am talking to IFA to determine my best course of action. I wait to see what he will have to say about the lack of documentation prior to signing up to them.

I have also looked at performance of various schemes over a 5 year perioed and found my DC company scheme is almost as good performance-wise once costs are deducted.

LHW99

Groover24 said:

I have a meeting with the SJP adviser / sales rep next week as he seemed to be a little upset that I am talking to IFA to determine my best course of action. I wait to see what he will have to say about the lack of documentation prior to signing up to them.

I have also looked at performance of various schemes over a 5 year perioed and found my DC company scheme is almost as good performance-wise once costs are deducted.

So could you transfer into the company scheme if SJP will release the funds without an exit fee to settle your complaint?

Groover24

@LHW99 NO, I think it is only regular contributions and there is only a defined window in which chnages can be made. I had thought of stopping contributions to SJP and move the additional money to the company scheme but not available until next year

Groover24

Groover24 said:

I have a meeting with the SJP adviser / sales rep next week as he seemed to be a little upset that I am talking to IFA to determine my best course of action. I wait to see what he will have to say about the lack of documentation prior to signing up to them.

I have also looked at performance of various schemes over a 5 year perioed and found my DC company scheme is almost as good performance-wise once costs are deducted.

Well, I had a meeting but still not quite convinced of what I am being told.

I did find the suitability report after all but only after I had receieved a copy by email. Apparently I was given it at an initial meeting but I am not sure if I signed over to SJP on the same date - possibly - and thus I conclude that I did not read it until after the event as I do not remember it at all.

One reason for not believing what I am being told is that I was told verbally that the charges are lower than my previous scheme but the report states that they are higher!! but not clear on what they are - I will read agan but I would expect a clear comparison

LHW99

the report states that they are higher!!

Probably accurate as it is a written record.

Fromdownwest

The fact that you received the report via email, will be easy for SJP to verify, so that element of a complaint my be hard to pursue.

I would personally contact your employer scheme, to establish if they can accept transfers in, employer schemes have much lower charges.

I would be careful comparing with IFA's as, during the process of winning your business, they too can be selective of what information is relayed. I would ask them to break down the total fees, split into adviser fees, platofrm fees, fund manager fees, and Transaction costs, I have seen many reports that fail to mention transaction costs, and at the minute, they can be quite significant.

dunstonh

One reason for not believing what I am being told is that I was told verbally that the charges are lower than my previous scheme but the report states that they are higher!! but not clear on what they are - I will read agan but I would expect a clear comparison

The report should show the charges of the existing scheme and the revised scheme.       Many advisers show the existing scheme with and without adviser charges and the proposed scheme with and without adviser charges.   That way you get like for like comparisons.   

However, I have come across reports in the past where it showed the existing scheme which didn't have an ongoing adviser charge having one added to it but not what it was without it.  They then showed their replacement which had the adviser charge.    So, a bit selective in what they were showing.

I would be careful comparing with IFA's as, during the process of winning your business, they too can be selective of what information is relayed.

SJP are not IFAs.   And I suspect that on a complaint, not showing the charges breakdowns correctly would result in an upheld decision.

. I would ask them to break down the total fees, split into adviser fees, platofrm fees, fund manager fees, and Transaction costs, I have seen many reports that fail to mention transaction costs, and at the minute, they can be quite significant.

SJP do not use funds that are subject to MIFIDII disclosure requirements on pensions.  SJP do not operate a platform.      Pensions themselves are not subject to MIFIDII and are not required to disclose the transaction charges. However, it is considered good practice to do so.   Most investors disregard the disclosure of transaction charges anyway, as it's not a real charge, but a synthetic figure with different calculation methods is allowed.

However, in my experience, IFAs would include it because they are more likely to use platforms than providers nowadays and use UT/OEICs rather than insured funds.