St James's Place Wealth Management Plc · DRN-5803774

The complaint Mr and Mrs H, with the help of a professional representative, have complained about the suitability of the advice given to them by St James’s Place Wealth Management Plc (“SJP”) to take out an Investment Bond (“the Bond”). They have also said that while they paid for ongoing advice reviews the reviews didn’t always take place. What happened Mr and Mrs H had a meeting with an SJP adviser on 29 July 2009 because they wanted to focus on their investment planning. The discussion covered a number of different areas of investing including some pension switches and ISA investments. However, the subject of this complaint is the Bond that they were advised to take out jointly. The information from the time shows that in relation to the Bond specifically, they had accumulated some savings that were being held on deposit, and they wanted to invest that sum for growth. The documents say that they wanted a spread of investments and greater diversification to create a future reserve and possibly some income in the future. It was also recorded in the documents that they wanted to receive direct servicing on the investment which was not something available through their existing provider at the time. The fact find that was completed at the time documented their circumstances as: • Mr H was 57 and Mrs H was 46. • They were married with no dependents. • They were both employed on a full-time basis with Mr H earning around £38,000 a year and Mrs H earning around £16,000 a year. • Mr H was also in receipt of regular pension income of £6,091 a year. • They had a joint disposable income of around £1,500 per month • Mr H has a personal loan of £6,000 which he was paying £249 a month for, and Mrs H had a personal loan of £6,500 which she was repaying at £289 per month. • Jointly they held a total emergency fund of £6,000 along with £26,000 on deposit which was the sum they wanted to invest at this time. • They also held between them an Open-Ended Investment Company (“OEIC”), an endowment and two ISAs with different providers. At the same time SJP assessed their attitude to risk which came out as them being determined as medium risked investors. An illustration for the Bond and a suitability letter were then provided to Mr and Mrs H. The illustration for the Bond set out that there was a charge for arranging the investment and for providing ongoing service throughout its term and that their adviser’s practice would be provided with direct remuneration and administrative services. It also set out the following details:

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• There would be an annual management charge of 1.5% a year to pay, reflected in the unit prices. • There was also a plan charge collected by cancelling the required number of units which is assumed to increase each year in line with Average Earnings Index. • A surrender charge also applied if the plan was surrendered in the first six years or if during that period withdrawals of more than 5% a year of the amount invested were taken. • A partial withdrawal charge also applied if withdrawals in excess of 5% a year of the initial investment were taken. • There was a cost for managing and maintaining the investment. • There were two free switches a year and after that further switches would incur charges The suitability letter dated 19 August 2009 confirmed Mr and Mrs H’s objectives for their investments were: • To achieve greater diversification to create a future reserve. • To possibly provide a future income. • To receive regular direct servicing. And that their main priority was to provide adequate income in retirement. The document also set out the reasons for the investment – that it would provide growth over a range of managed funds and would allow Mr and Mrs H to take advantage of the SJP approach to investment management. It also allowed them to invest in a tax efficient manner and to invest without paying a bid to offer spread. The suitability letter also recorded that a discussion around tax implications took place as well as alternative actions. Affordability was also covered and it was noted that they had agreed to discount an ISA for Mrs H because they did not want to pay a bid to offer spread and there were no managed funds available with the ISA at the time of advice. As a result, the SJP adviser recommended that Mr and Mrs H invest £26,000 into the Bond which would be invested in a medium risked portfolio. There was no specific agreement about regular reviews within any of the documentation provided. Around a year later Mr and Mrs H met again with SJP on 20 October 2010, to discuss investing the proceeds of a matured endowment into the Bond. There were no change in their circumstances. The SJP adviser provided a suitability letter on 15 November 2010, which confirmed the recommendation of an additional contribution of £15,000 into the joint Bond. The attitude to risk and fund selection remained the same as the 2009 advice. The proceeds of the endowment were £18,000 and therefore £3,000 was being added to their savings. The illustration provided to Mr and Mrs H on 11 November 2010 confirmed the charges that would apply to their Bond and the new investment – details of which mirrored the information provided to them in 2009. The illustration also set out that regular reviews of their circumstances were strongly recommended and that SJP would contact them on the anniversary of the Bond’s start date

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to arrange this. However, no separate charges for this service were detailed in the illustration document. Mr and Mrs H complained to SJP on 23 September 2024 about the suitability of the advice at both these points in time as well as the lack of any ongoing advice reviews despite them paying ongoing adviser charges (“OACs”). SJP provided its final response letter on 12 March 2025 not upholding any points of the complaint. Unhappy with this response the complaint was then referred to this Service where it was assessed by one of our investigators. She was satisfied that the advice to take out the Bond in 2009 and the subsequent advice given in 2010 was suitable for Mr and Mrs H at the time. She also found that they hadn’t paid any OACs on the Bond and so SJP wasn’t obligated to conduct annual ongoing advice reviews. Mr and Mrs H, through their representative, didn’t agree with the assessment. They maintained that OACs were being paid on the Bond and reiterated it felt the advice to take out the Bond was unsuitable. The investigator considered their arguments but wasn’t persuaded to change her initial outcome. So as no agreement could be reached the complaint has been passed 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. I’ve taken into account relevant: law and regulations; regulatory rules; guidance and standards; codes of practice; and (where appropriate) what I consider to have been good industry practice at the relevant time. Where the evidence is incomplete or inconclusive, I’ve reached my decision based on the balance of probabilities – in other words, on what I think is more likely than not to have happened given the available evidence and wider circumstances. In regard to the suitability of the advice Mr and Mrs H received in 2009 to take out the Bond, first it’s important to point out that my role is not to decide what the best or most perfect advice would have been for Mr and Mrs H, or any consumer. My role is to look at the advice and the recommendations given and decide whether, from the information in front of me, what was recommended was in line with the consumer’s needs and objectives at the time taking account of their personal and financial circumstances. As a regulated firm, SJP had many rules and principles that it needed to adhere to when providing advice to Mr and Mrs H, namely the FCA handbook under the Conduct of Business Sourcebook (COBS) and Principles for Businesses (PRIN), as they were at the time of the advice. As well as this, in deciding whether the advice was suitable I have considered what obligations SJP had when providing that advice and in conducting its suitability exercise. In doing this I expect to see that a business has obtained necessary information regarding the consumer’s knowledge and experience in investing, their financial situation and any investment objectives – essentially enough information to understand the most important

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facts of the consumer so that the recommendation meets the consumer’s investment objectives. These considerations include their attitude to risk, the purpose of investing and how long they want to invest for; whether the consumer can financially withstand the investment risk; any potential future changes to their circumstances (financial and personal); the extent of their regular income, assets, cash holdings, investments, property liabilities and regular financial commitments. The advice Mr and Mrs H received was to invest a lump sum of cash that they held on deposit into an investment bond. As mentioned above they had a clear objective for this money – they wanted it to grow to provide for their future – so I am satisfied they had a need for this advice. Leaving the cash where it was wouldn’t have enabled it to grow as much as it could by being invested. They invested £26,000 out of a possible £32,000 and while this represented around 81% of their available cash held on deposit given the specifics of their circumstances and keeping their objectives in mind, I don’t think this was unreasonable. As I have said before, they wanted this money to grow so it had to be invested for this to happen. They were also both still working and had several years left until their chosen retirement ages so they had a regular income and would have been able to withstand any loss the investment potentially suffered. They also weren’t using the lump sum of cash for anything else nor were they reliant upon it for daily living so it was prudent to do something with the money that they could benefit from. In addition, they had a good amount of cash available for emergencies and the remaining cash left on deposit would have bolstered this, so I am satisfied their capacity for loss was taken into account correctly. In terms of the risk level they were subject to by the Bond, they had some experience with investing. The fact find demonstrates that they had a number of other investments and had held a joint OEIC and ISAs for at least five years. So I think they would have understood the meaning of risk as well as understanding how the financial markets worked. So, in light of this I don’t think their attitude to risk of medium was incorrect or unsuitable. Again, it goes back to their overall financial position and their capacity for loss. And in their specific circumstances I see nothing wrong with them taking a medium level of risk given they were still earning, were some years away from retirement and held a good amount of available cash on deposit even after making the investment to help them if they suffered losses. I appreciate that as they were investing a lump sum that had been on deposit, likely incurring no charges, there were going to be new charges associated with the Bond that they would incur. However, I don’t think the charges outweighed the benefits they would get from investing the monies. Their objective was investing for growth, so I think the charges were something they were willing to pay in return for more growth on their monies. I am also satisfied that alternative actions were examined, such as investing in unit trusts and Mrs H investing into an ISA. But it was recorded that these options were discounted because there were no managed fund options available within these plans which they wanted because they were impressed with the performance of the SJP managed funds. The information from the time also indicates that they wanted to avoid contracts involving upfront charges such as a bid and offer spread which on this occasion would have resulted in charges of £680. So for that reason, the ISA and unit trusts were ruled out. I can also see that an income distribution bond was also discounted because they wanted access to the invested monies – which is something the Bond provided them with - they could take regular withdrawals of 5% from their investment if they wanted. I know Mr and Mrs H both held personal loans at the time of advice, although there is no further information provided other than the loan amount and monthly payments. However, from the evidence available, I am satisfied these payments were covered within their

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monthly expenditure. Also paying the loans off was discussed within the suitability letter but it seems from this that this was discounted by Mr and Mrs H as they felt the advantages of investing outweighed the disadvantages of retaining the debt. Furthermore, they were looking to build up some monies for their future, and while they could have used the sum on deposit to pay off their loans that wouldn’t have met their objectives of building a lump sum in the future. So overall for the reasons I have explained I am satisfied that the advice given to Mr and Mrs H in 2009 to take out the Bond was suitable for them at the time and met with their stated needs and objectives. 2010 advice When Mr and Mrs H met with SJP in 2010 their objective was to invest the matured proceeds of an endowment. The fact find completed at the time shows no change in their circumstances, or indeed their attitude to risk or fund selection. At the time of advice in 2010 Mr and Mrs H had accumulated savings of £27,108, which would be £12,108 after the investment. Although this is stated as £9,500 in the suitability letter, the lesser of the two figures would still show that additional £3,500 of emergency funds was available following the investment, in comparison to 2009, and continued to be above the three months emergency expenditure recommended by the SJP adviser. The paperwork from the time also shows that again there was a recommendation made to invest into an ISA, but this was declined by Mr and Mrs H for the same reasons as 2009. Similarly, the personal loans were recommended to be repaid however this was also declined. So taking this information into account I am again satisfied that the advice provided to them in 2010 in relation to the Bond was suitable for them. I am also satisfied that at both points of advice they were provided with a significant amount of detail about the Bond, its costs and what possible alternatives were available to them. So I think they were in a position to make a fully informed decision about investing in the Bond. OACs The Bond started in 2009 and then a further investment was made into it a year later. At this point in time the Bond didn’t attract any ongoing review charges although advisers could receive trail commission for products that were sold. However, this changed on 31 December 2012 when the rules governing how advisers are paid changed across the industry. This was known as the Retail Distribution Review (RDR”). The changes meant that when a review service was to be provided a separate charge known as an OAC should be agreed and deducted from the plan as a separate charge which could be turned off should advice no longer be required. The separate OACs would be applied to an investment which predated the start date of the RDR if a triggering event on the investment took place, such as further contributions or top ups being made. However, this didn’t happen with the Bond. And as these rules couldn’t be applied retrospectively, I am satisfied that no separate OACs were charged on the Bond. This is supported by the illustrations of the Bond which do not detail any separate OAC. My final decision For the reason above my final decision is that I don’t uphold this complaint and I make no award.

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Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs H and Mr H to accept or reject my decision before 10 April 2026. Ayshea Khan Ombudsman

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