Data from the Financial Ombudsman Service highlights a sharp rise in the number of Ongoing Advice complaints against the wealth management company in the second half of 2024.
The latest figures from the Financial Ombudsman Service show 1653 complaints in the second half of 2024, up from 485 in the earlier part of the year. There was a total of 376 complaints in 2023.
What is the role of the Financial Ombudsman?
The Financial Ombudsman (FOS) exists to investigate and arbitrate disputes between financial institutions and their customers. Typically, a customer will take their complaint to FOS if they feel they have been treated unfairly or have suffered financial loss due to the firm’s actions. FOS operates a two-stage investigation process, and an Ombudsman’s final decision is legal and binding.
In the case of St James’s Place, a UK-wide wealth management company made up of a network of financial advisers, most customer disputes relate to a lack of ongoing suitability reviews and their complicated and restrictive fee structures. The firm has also been criticised for offering poor value funds.
When did issues with ongoing advice reviews arise?
City watchdog, the Financial Conduct Authority (FCA) introduced Consumer Duty in 2023, a new set of rules and guidance for the financial services industry to put customers’ needs first and ensure that they receive ‘good outcomes’. Customers should have access to products and services that suit their needs and provide fair value, and all communications should be clear and appropriate, particularly for vulnerable customers.
Different financial industry sectors have been subject to FCA scrutiny, including ongoing advice, pension transfers and pure protection insurance.
The FCA wrote to 22 of the largest advice firms in early 2024 asking for information about their ongoing advice practices. A year later, the findings were published, which showed:
- 83% of ongoing suitability reviews were delivered as expected
- 15% of clients declined or failed to respond to an offer of a review
- 2% had not been contacted for a review
While the percentage of people who did not receive the ongoing service they were paying for appears small, it is unclear whether 2% represents the whole industry. For example, smaller firms may not have sufficient in-house resources to implement the Consumer Duty fully and alter their practices. The real figure may, indeed, be much higher.
What is the St James’s Place redress scheme?
+ −As a result of the Financial Conduct Authority (FCA) investigation, St James’s Place (SJP) reviewed its practices in early 2024, set aside £430 million for a redress scheme to compensate clients, and began actively contacting clients who may not have received the ongoing service they were paying for.
The redress scheme is administered in-house, and existing and former clients can complain directly to SJP. While this may seem to be the quickest and easiest way to get a refund, those seeking redress should be aware that:
- The Financial Ombudsman Service is an independent body that reaches its conclusions based on what is ‘fair and reasonable’.
- Getting independent legal and financial advice may highlight other issues you were unaware of, for example, regarding fee structures or investment mis-selling.
- Having your own legal representation gives peace of mind that complex rules and jargon are explained clearly, time limits are adhered to, and compensation/refunds are accurately calculated and proportionate.
TLW Solicitors’ view
+ −Sarah Spruce, Legal Director at TLW Solicitors, says:
“SJP has said that the surge in complaint numbers to FOS “is largely driven by the increase in activity of claims management companies targeting clients”. This may be partly true, but it remains that SJP has not delivered the service it said it would, and their clients are entitled to claim a refund. The welcome increased publicity around the FCA review will have encouraged people to come forward, and the figures also reflect SJP customers’ desire to ensure an independent third party investigates their cases.
We are working with many SJP customers seeking reassurance that their complaint will be looked at fairly and they receive the compensation they are rightfully owed, particularly those with more complex cases.
As an existing or former SJP client, if you or a loved one are concerned about the service you have received, get in touch with my specialist team to see if you may be eligible to make a ‘no-win, no-fee’ claim.”
What should I do if I have paid for ongoing financial advice that I have not received?
+ −If you or a loved one are a current or former client of St James’s Place (or indeed any other financial advice firm) and have paid for an ongoing advice service that you have not received, you may be eligible to claim compensation.
Contact our experienced pensions and investments team for a confidential and no obligation discussion to explore your options and see if you can make a ‘no win, no fee’ claim.
You can call us on 0191 293 1500, email info@tlwsolicitors.co.uk or complete one of the forms below.
Time limits can apply, so anyone wishing to bring a claim should do so without delay.
Minimum case values apply.
Meet the Team
Meet Sarah, Legal Director at TLW Solicitors.
Sarah and her colleagues are on hand to help with your claim.
