Can I sue my finacial advisor, and or company

Bbeanie

Gave my FA instructions in Mid Feb 2020 to make a drawndown in that tax year.  Had retirred earlier that year (slightly early) and wanted to utilise £2,250 tax free amount remaining from my personal allowance that year.  Also instructed him to instigate a drawndown at the beginning of the next finacial year for £10.500, again to utilize the remaining tax free amount for the year 2021.  Long story short, I hear nothing back and started chasing them only to receive a text from them on March 10th saying they were on holiday??

On 23rd March, received a text from them to say the markets were no good and not to withdraw the amount, saying it will hurt the pension too much and we had ulntil the 5th April to make the withdtrawal??  It was a tiny amount and would have make no difference, but obviously, I came to realise that he was covering his !!!!!! with this text because he had not carried out my instructio and completely mssed the deadline because he was more focused on his holiday. (Even stated by the Ombusdman).

Was really annoyed anf sent text saying why had this not already completef.  Also complaining I was not happy about it.  At that point in time, I did not realise there were cut off dates which I learned about later, so of course it never went through and I lost the ability to take the tax free amount forever!

He did not reply to my complailnt, nor did he make the withdrawal for the £10.500 in April that he had been instructed to.

Having heard absolutely nothing from him I phoned the company in May of 2021, telling them I did not want him as my finacial advisor anymore, effectively sacking him.  I also said I did not want to stay with the cojmpany anymore and asked about fees to move.  They said there were none.

Unfortunately, this was the very start of the pandemic.

I did not hear from either the company or the FA unitl February 2021 when my FA sent me a text, followed by a letter a couplre of weeks later.  I was very surprised to receive these and considered them to be unsolicited and ignored them, thinking that as he still worked for the company, he knew they haf not given my a new FA and was trying to reinstate himself.

In 2024 I wanted to make a full withdrawal within the 20% tax band as I had decided I just wanted to take my monies out as I was not happy with the company.  I phoned the Company on 8th March 2024 telling them exactly what I wanted to do and how much I wanted to withdrawn.  Specifying it HAD to be in that tax year, having worked out exactly how much I could withdtraw before being dumped in the 40% tax bracket.  The cutoff that year was 20th March....They did not electronically request it until 26th March.  Of course, this dropped me right in the 40% tax bracket and I had to reverse the whole withdrawal.  (Ombudsman stated they had failed me AGAIN)!

I then discovered that my previous advisor had beern drawing down his 1% fees for the three years AFTER I had sacked him through the company.

I instigated complaints for both of these incidents but of course they dismissed them out of hand.

Basically, both of these complaints ended up with the Ombudsman, treated as one case, it has taken forever and now they have come back saying I have suffered no monetary loss and offered me £400 for stress and anxiety??

How was the fee justified in 2020 when he did not provide the service I was paying him for?
I lost my tax free amount in 2020 which cannot be ever recovered as beyond that it would be subject to tax.  
I lost my tax free amount in 2021 as I was unable to meet any new FAs in 2021 due to the pandemic, again, lost forever. although I guess this is debateable.
How could he draw his 1% fees for three years after I had sacked him through the coimpany?

I am really unhappy abojut this and this it is grossly unfair and am now considering taking it to the small claims court.  Do you think I may have a case?

masonic

Using the Financial Ombudsman will often lead to a better outcome than the county court. The £400 offered for distress and inconvenience looks reasonably appropriate.

What financial loss do you believe you have incurred as a result of the inaction on the part of the FA? Investments have generally risen since March 2020, so wouldn't you now be better off than you would have been?

Regarding the fee, when an adviser doesn't claim this, it is generally just kept by the service provider, so it is unlikely to have made any difference. Whereas you could have saved a lot of money by choosing alternative advice arrangements, such as IFA rather than tied FA, or DIY with some simple guidance. That was and remains your choice.

If considering legal action, you should consider whether or not the fee can legally be taken based on the contract (whether or not you use the service and are satisfied with it) and whether the contract is legally enforceable. Without deficiencies in the contract, or evidence you wouldn't have been provided with the services if you requested them, your legal claim is unlikely to get much traction.

masonic

Forgot to ask, have you already escalated from adjudicator/investigator to an ombudsman for a final decision? If not it's an option, if so could you share the DRN reference as this would allow us to see the ombudsman's reasoning.

Bbeanie

Thank you for your reply Masonic.

Losses: 

The tax free amount on £2,500,  Aprrox £500 which I could never recover due to subsequently receivling the state pension.

The fee for 2020?  Why should he receive the fee when he failed to carry out my instructions.  (Ombudsman agrees he failed in his duty saying he was disengenuous for saying it could be processed up until 5th April, but has not given me back the fee?  What was I paying him for? What was I paying them for?

Three years of fees, kept by the service provider?  Why is that?  I am already paying them a seperate fee?
£10,500 tax free amount approx £2,100 again can never claim back, but would admit this amount is tenuous.

When I moved my pension from my works pension into a sipp with this company, I had to pay a fee of several thousands.  I thought it was a one off but I have spoken to another FA through Pensionwise and they have told me that I have to pay this fee again to move my money into a new company??  Surely this is incombent on them?  Is it really reasonable for anyone to think I should stay with a company who has failed in their duty TWICE, successively and then have to pay for the priviledge of moving my money?

The Ombudsman said on the balace of probabilities he believed my version of events.

Bbeanie

'Investments have generally risen since March 2020, so wouldn't you now be better off than you would have been?'

Why would this impact the case with the Ombudsman?  
I took the company off my account with the company that holds my shares about a year ago?

Bbeanie

Hi Masonic,

No, I haven't escalated it to the Ombudsman yet, but I certainly intend to.  Won't the Ombudsman take the advice of  his investigator thougfh?

QrizB

Bbeanie said:

Having heard absolutely nothing from him I phoned the company in May of 2021, telling them I did not want him as my finacial advisor anymore, effectively sacking him.  I also said I did not want to stay with the cojmpany anymore and asked about fees to move.  They said there were none.

Have you left the FA company, or are you still with them?

What is the name of the FA company?

Bbeanie said:

I then discovered that my previous advisor had beern drawing down his 1% fees for the three years AFTER I had sacked him through the company.

Who charged you the fee, the individual advisor or the company they work for?

Bbeanie said:

In 2024 I wanted to make a full withdrawal within the 20% tax band as I had decided I just wanted to take my monies out as I was not happy with the company.  I phoned the Company on 8th March 2024 ...

Is this the same company that you wanted to leave in 2021?

Bbeanie said:

Three years of fees, kept by the service provider?  Why is that?  I am already paying them a seperate fee?

What separate fee are you paying them? Is this on top of the 1%?

Bbeanie said:

When I moved my pension from my works pension into a sipp with this company, I had to pay a fee of several thousands.  I thought it was a one off but I have spoken to another FA through Pensionwise and they have told me that I have to pay this fee again to move my money into a new company??  Surely this is incombent on them?

There is usually an initial fee when joining a new advice firm (whether FA or IFA). Is your new FAna representative of a national form or are they a small local business? How much are they asking for?

Bbeanie

Thank you QrizB.  I am going to check some of my answers before I respond.

masonic

If you've had to pay more tax as a result of drawing down the £2,500 in a different tax year and the Ombudsman has sided with you that this is the fault of the FA, then the only reason I can think of for nothing being awarded for the loss is that overall there is no loss. For example if the investments went up in value by more than the extra tax you paid.

For the fees, they will be taken in accordance with the contract. You've been awarded £400 because the level of service you received was inadequate and led to distress and inconvenience. You need to look at the contract to understand what the fee covers and whether there is any service level guarantee. Most likely the poor service is not a breach of contract that would enable you to reclaim fees, but only by reviewing the contract will you fully understand this.

Many advised investment products have special rates conditional on you taking them out through a FA and paying them a commission, so when you break that relationship then it may entitle the service provider to retain the fee themselves during periods you are without an adviser.

Ultimately the job of an Ombudsman is to look at things as a whole and decide whether or not you are financially worse off overall Vs the scenario where you didn't experience the poor service. You say they don't believe you've suffered a loss. They will understand the case much better than anyone here based on the limited information you've given, certainly nothing you've stated makes it clear there was an overall financial loss.

The decision letter, which if from an Ombudsman would be available for review, may help us understand the decision. If you have a DRN reference you could share, it would lead to better responses.

Regarding the legal action, arguments of "I don't think it's right they should keep their fees" will not sway the court. You need to build arguments based on contractual terms and points of law.

Regarding transfer fees, these are normally levied by the losing provider, so you would only be paying them for the first time to this provider when transferring out. Some gaining providers will refund exit fees to incentivise a transfer to them.

Bbeanie

Yes, I have left the company now and it is with Parmenion.

No offence, but does it matter?

As far as I can tell, it was the individual advisor.

Yes, but sadly, the pandemic got in the way and I was not able to meed with any financial advisors.  Having been bitten, did not want to move my funds over the phone, but have since discovered the amount I have to pay to move them.

I thought they were getting the fund management fee?  Thought when I moved to them it was explained that the Advisor would get a fee and the company would get a seperate fee, but I could be wrong.  Was quite a while ago.


Taken from the 2020 report

Adviser charges  1.00%

Parmenion custody charges 0.25%

DFM charges  0.35%

Service charges Dealing charges  0.00%

Ongoing fund charges  0.62%

Fund management charges Trading charges  0.08%

Incidental charges  0.00%

Total charges  2.30%

The FA I spoke with told me the fees would be the same as I had already paid.

It was explained to me when I opened the account that the government had introduced legislation to assess suitability to transfer out of company pension, but to be honest, I had no dependants and another pension so did not see any problem, but had to pay thousands for the priviledge.

Bbeanie

Thank you Masonic.

There are no exit fees.  I was told these were fees I would have to pay to invest in another company.  Basically, I was told that they would have to do the same assesment as was done when I moved my firms pension and therefore, the fees for it would be the same.