St James Place & Financial Ombudsman Decision

billbomoney

Hi, Wondering what to do and if anybody has been through the same and found a good solution.

In short, my pension was moved to SJP 10 years ago.  The advisor we new personally, and we understood we were being looked after.  After selling my company and taking early retirement, I reviewed my pension and the performance was about 3% per annum from a mid-high risk plan.  Transpires that the advisor had left the SJP company, and we had been abandoned yet SJP kept taking fees.  We complained, got nowhere, the Ombudsman got involved and ruled that we had not had reviews.  In particular, reviews missed for 3 years just after inception, but those years were excluded because they were over 6 years ago.  Then 4 years missing 2020 to 2024.
Ombudsman rules that OAC's were to be refunded but said that our pension investment return % was not impacted.  We argued this point and a final ombudsman decision did not change this.
We figured SJP had taken c.£100k in fees over this period.  So expected to get c.£40k back.
We were told if we did not accept the decision court was the only option, would take a long time and be costly which we could not afford, so agreed to the decision even though we did say in writing to the Ombudsman that we dont feel we can agree without knowing the figures....
SJP have provided figure and they calculate it at £10k.
This is appalling. SJP acknowledge they didnt do reviews but still will end up with c.£90k in profit.
Feels like the Financial Ombudsman is weak enforcer and not really there to make SJP pay, learn from their mistakes and compensate the victim.

I have said I reject the compensation offer, and the Ombudsman has basically said Tough... its legally binding.

Any ideas or options?

MeteredOut

You said you "were moved" to SJP. Did you advisor not tell you that was happening?

Can you break down the £100K in fees and how you calculate the expected £60K back based on the FOS decision, and how SJP calculate the £10K?

I suspect once you agreed the FOS decision, it becomes binding, no matter what caveat you might add.

gm0

No.  The Product is not at fault.  The advisor is for failing to do the reviews and wandering off.  

Their contract depending on the age will have had a tied advisor network element (which has failed).  And a product element which has done exactly what it promised to do. Fees (high) and performance (likely meh).  In house portfolio of portfolios with funds switching in and out to make tracking below top level harder

It is unlikely if you have got this far with the complaint that you will do better than a refund of the "advice" element of the fees.  Given the wealth management bundling/rebundling of such things. This is very likely less transparent than you may like

You can sue (and spend money and likely lose)

Or you can take you 10k and go.

What I would do is attempt to insist that any "deferred mangement fee" for existing customers (no longer applies to new now) is waived when you transfer away.  

Otherwise you may come to loathe them all the more

QrizB

In your shoes I'd take the 10k and transfer away to a cheaper provider (or a DIY platform).

DRS1

If you can prove that your £40k figure is the correct amount for what the Ombudsman has awarded you then submit the evidence for that to the Ombudsman and get him to issue an order for that amount.

And as others say get your pension away from SJP (if you haven't already done that).

dunstonh

 In short, my pension was moved to SJP 10 years ago.  

Transpires that the advisor had left the SJP company, and we had been abandoned yet SJP kept taking fees. 

SJP would continue to take fees.     Fees are made up of three segments.   Provider, investment fund and adviser.  SJP would continue to take provider and investment funds.   They should have stopped charges on the adviser segment, though, if no new adviser was put in their place.    However, the provider fee and investment fee would continue.

We complained, got nowhere, the Ombudsman got involved and ruled that we had not had reviews.  In particular, reviews missed for 3 years just after inception, but those years were excluded because they were over 6 years ago.  

Like in law, there are time bars.   6 years from the event and 3 years from being reasonably aware of an issue are the ones being relied on here.      Both have to be met to allow timebarring.   You get an annual cost and charges disclosure.  So, that prevents the last three years from being timebarred.     And the 6 year rule means that the last 6 years can be considered but not those before that. 

Ombudsman rules that OAC's were to be refunded but said that our pension investment return % was not impacted. 

The interest that gets added to the refund is typically greater than investment returns. 

We figured SJP had taken c.£100k in fees over this period.  So expected to get c.£40k back.

Of the AMC you paid, 0.5% went to the adviser.   You must have a bloody big pension value for your adviser fee to be that high.

Or are you mistakenly thinking that all fees should be refunded?

Feels like the Financial Ombudsman is weak enforcer and not really there to make SJP pay, learn from their mistakes and compensate the victim.

The issue is pretty black and white.   They are not there to make SJP pay more than they should.  They are there to make sure the correct amount is paid.

I have said I reject the compensation offer, and the Ombudsman has basically said Tough... its legally binding.

It is worth noting that if you do not accept it within a certain period, you lose the right to use the FOS again on this point.  Once you have accepted it, it ends the complaint and treats it as full and final settlement.

This is appalling. SJP acknowledge they didnt do reviews but still will end up with c.£90k in profit.

That is an incorrect assumption on your part.  The member firm was contracted to do the reviews.   SJP will attempt to claw that £10k back from the member firm (i.e. the firm your old adviser was a member of).  Unless your old adviser was a sole firm member, in which case, SJP will carry the loss.    Charges for product and investment are irrelevant.

Any ideas or options?

My gut feeling is that you are mistakenly adding up all the charges and assuming you should be refunded all of them.   

£100k in adviser charges over 4 years suggests a fund size of around £ 2.5 million.  Is that really how much your pension is?
.
Even £10,000 suggests a large fund (circa £300k-400k).  Although some of that £10k being compensation interest.