UBS AG · DRN-6239760

The complaint Mrs T complains that UBS AG have unfairly closed her investment accounts, and about the suitability of advice she was given to invest in a discretionary portfolio. What happened In 2017 Mrs T became a customer of UBS and in 2018 she invested in an execution only portfolio, for the purpose of having a visa to stay in the UK. In 2021 UBS advised her to invest $100,000 (USD) of the cash held in the execution only portfolio into a discretionary managed portfolio at a risk level of ‘balanced’, the fourth highest of six levels of risk. On 16 January 2024 UBS wrote to Mrs T giving her two months’ notice that her accounts would be closed. They explained that after two months, she wouldn’t be able to transfer any money into her accounts, and the only instructions they would accept would be to sell the investments or transfer them out to a different provider. They would also stop providing a discretionary management service, and any fees for advisory and discretionary services would stop. Mrs T subsequently complained, with the assistance of a representative. Although she’s represented in the complaint, for ease I’ll just refer to the submissions as though made by her. She felt the discretionary portfolio had not been sufficiently explained and if it had been, she wouldn’t have invested in the strategy and felt it had not performed well. She was also unhappy that her accounts were being closed without explanation. UBS didn’t uphold the complaint about the account closure but did uphold the complaint about the advice for the discretionary portfolio. They said they couldn’t evidence full explanations had been given about the portfolio, so they made an offer of $15,917, which they paid to Mrs T, and was made up of: • $4,844.98 - a refund of fees for the discretionary portfolio from 20 May 2021 to 30 April 2024, plus interest, less tax. • $9,368.04 - the amount of interest the $100,000 would have received had it remained as cash in the execution only account between 20 May 2021 and 30 April 2024 ($7,879.96), plus interest at 8% on $7,879.96 for the same period, less tax. • $789.04 - 8% interest between 1 May 2024 and 14 June 2024 on that redress, less tax. UBS also paid £100 compensation for the amount of time it had taken them to review the complaint. Mrs T didn’t accept the offer and brought the complaint to our service. Mrs T explained that she was willing to take more risk than that involved in the balanced portfolio and felt this ought to have been picked up at the subsequent annual reviews. She made the following points: • The growth rate she’d achieved on the execution only portfolio should be used to calculate her loss, which would amount to around $43,000. Had suitable advice been given she likely would have invested more than the $100,000 – the reason she didn’t was because of the promises of a better return in the discretionary portfolio. • She asked for a refund of charges applied by third parties within the portfolio, which have continued after April 2024, compensation for time spent by her representative in

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dealing with the complaint, and compensation for distress and inconvenience of over £5,000, caused by the closure of the account. • She asked that the closure of the accounts be delayed by 12 months. • VAT had been included in the advice and discretionary portfolio charges, despite Mrs T not being a UK resident. • She hadn’t received the call recordings from meetings during 2021 and later years which were requested several times and felt this was vital to the outcome of the complaint. • Regarding account closure, UBS has let Mrs T reinvest dividends since closure, so ought to allow fund switches too. • There were several complaint points and questions that UBS had failed to address, including that various account fees weren’t explained, there was a delay in UBS dealing with the complaint, that she wasn’t allowed to switch between funds, and that they hadn’t provided information requested. She was also concerned that the amount offered had been paid already, despite not accepting it. An investigator at our service considered the complaint and found that the offer made by UBS was fair. He found that the account closure was in line with the terms and conditions and that UBS had acted fairly in giving Mrs T time to source another account. With regards to the redress offered, he felt it was fair to say the money would have remained as cash, as Mrs T had a large cash balance that she maintained throughout, and rarely traded. He said the offer included additional interest that he wouldn’t have said should be paid, so it was more than he would have awarded. The investigator sent Mrs T four call recordings from 2021 that UBS had sent us. He pointed out that as the investment had already been deemed unsuitable, there wasn’t any need to go into detail on many of the other points, as they wouldn’t change the outcome. Mrs T remained unhappy and as no agreement could be reached, the complaint was passed to me for a final decision. I asked UBS for their comments on whether an alternative benchmark ought to be used to calculate redress here, based on investment returns rather than interest. This was based on the comments Mrs T made in the calls when advice was given on 22 April 2021. In reply UBS said: • They weren’t convinced Mrs T would have invested the money and if it had been invested, it wouldn’t have been in the same mix of assets as the execution only portfolio, as that was invested specifically for visa purposes. • As of 13 February 2026, the discretionary portfolio was worth $137,947.08. Based on Mrs T’s $100,000 investment and deducting the redress paid by UBS, the unrealised gain as of 13 February 2026 would be approximately $21,883.57. • They’d awarded 8% interest where the interest rate in the execution only account was around 4-5%. • They didn’t deduct any gains made in the discretionary portfolio when they paid the redress, and so she’s benefitted from both. Regarding the call recordings, I explained to Mrs T that I wouldn’t be requesting the recordings from after 2021 as I felt I had enough in the transcript of the calls from 22 April 2021 and asked for her comments on that. In summary she said: • The call on 22 April 2021 is not very well reflected in the suitability letter, which seems to be based on the earlier years plans with small updates. • At the later annual reviews in 2022 and 2023 UBS had an opportunity to be transparent with her, and if the recordings of those calls were obtained, they would shed additional light on the poor advice.

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• She reiterated her view that redress should be based on the performance of the execution only portfolio. I then issued a provisional decision on the complaint, as follows: “I’ve first considered the account closure before going onto considering the suitability of the advice and a fair way of putting that right. The account closure In my view, the decision to close Mrs T’s account is ultimately a business decision for UBS. UBS is a private business that does have the right to refuse custom as it sees fit based on their own internal parameters. UBS’s parameters could evolve over time, which isn’t unusual, so the fact that their approach changed at some point between 2023 and 2024 isn’t unreasonable. They have important legal and regulatory obligations to carry out when providing accounts and will review accounts either periodically, or on an event driven basis. I understand the exact reasons for closure haven’t been given to Mrs T and she would like to know exactly what triggered their review and decision to close the accounts. But UBS are not obliged to reveal this. I have however considered their reason(s) which I have accepted in confidence, which I am able to do under the Dispute Resolution Rules which govern the powers of the Financial Ombudsman Service. In summary, I find their reason(s) for reviewing and closing Mrs T’s account understandable, and I’m satisfied they complied with their terms and conditions and wider obligations. I’d expect any communication following such a decision to be carried out fairly, reasonably and in line with any of the processes set out in the terms and conditions which govern their agreement with Mrs T. Sections 25 and 26 of the terms and conditions are pertinent here – in my view the relevant excerpts are as follows: “We may terminate this Agreement, or any service we provide under it, by giving you thirty (30) days' written notice… in accordance with this Agreement, except where we terminate the terms relating to any current Account when we will give you at least two (2) months' notice. No penalty will become due from you when we terminate these Terms and Conditions… On termination of this Agreement if we have received no instructions from you in respect of your money or assets within thirty (30) days… we may: (i) take any of the steps set out in sub-clause 26(b); (ii) deliver any investments or assets which are held by us or to our order on your behalf to your last known address; or (iii) request that you accept redelivery to you or a third party selected by you and approved by us, of any Securities delivered for deposit to any of your Accounts and you agree to complete and sign any documents necessary for us to do this and give us all necessary permissions to complete and sign any such document on your behalf where reasonably necessary.” So, UBS must give at least 30 days’ notice and they gave Mrs T two months’ notice and I’m satisfied the letter from January 2024 set out the situation in a clear way. At the end of the two months, UBS had the ability to fully close the account but instead have given Mrs T over two years (to date) to find alternative arrangements. In my view that is more than fair. Since the end of the two months, I’m glad to see UBS has stopped charging for the advisory and discretionary management services they were providing, as Mrs T wouldn’t have been able to benefit from those services.

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I can see that Mrs T is unhappy she can’t make any fund switches, but that was clearly set out in the correspondence in January 2024. In asking to be allowed to make fund switches, she’s effectively asking them to reverse the notice she was given. I’m not convinced UBS need to allow her to use the accounts any more than she currently is able to, which includes allowing fund switches. Mrs T had an opportunity to change the investments in both the execution only and discretionary accounts before the end of the two months if she had wanted to and I can see she did make changes to the execution only account at that time. If Mrs T wishes to do more with her investments, other than sell them, then she should move them to a new provider, and I’m satisfied that UBS has given her plenty of time to do so. Regarding Mrs T’s arguments about the third-party charges within any of the investments, these are not charges I’d expect UBS to directly refund – it is Mrs T’s choice to remain invested. I’ve carefully considered Mrs T’s submissions about how this account closure has affected her. While I sympathise with her situation, given I’ve found it was reasonable for UBS to notify her of the closure in the manner that they did, it follows that it wouldn’t be fair to say they ought to compensate her for the impact of the closure of the account. The advice in 2021 It’s not disputed that the advice given in 2021 was unsuitable for Mrs T, primarily because it wasn’t properly explained, and for completeness I agree with that conclusion. Therefore, the focus of my decision will be on how to put things right. The question I need to decide is what Mrs T likely would have done, had she been given suitable advice. Our service makes findings of this sort based on the balance of probabilities – what is more likely than not to have occurred. Given Mrs T’s resources, I’m satisfied that investing the $100,000, rather than leaving it as cash, was not an unsuitable recommendation. Based on the transcripts from the calls on 22 April 2021, I’m satisfied that she had a reasonable understanding of the risk of investing compared to holding in cash, and that she wanted to invest that amount. The question then becomes deciding what she would likely have invested in, had suitable, clear, fair and not misleading advice been given. I’ve carefully considered Mrs T’s arguments that the performance of the execution only portfolio should be used to measure the growth she would have otherwise achieved. I understand that portfolio was invested to meet visa requirements, and at the time the minimum requirement for an investment visa was that £2 million was invested in the UK by way of UK Government bonds, share capital or loan capital in active and trading UK registered companies. Having seen the full transaction history, following several purchases of shares and bonds in 2018, there was not much activity on this portfolio until 2021, when the $100,000 was moved to the discretionary portfolio. It’s clear that the mix of assets in the execution only portfolio is specifically designed to match the visa requirements. In 2018, she had invested just over £2 million in government and UK corporate bonds and just over £4.5 million in shares of FTSE 100 companies. Generally, these are not considered particularly high-risk investments. I’ve no evidence of whether that asset mix reflects what Mrs T’s attitude to risk was in 2018, if she had not been constrained by the visa requirements. So, I’ve considered what I do know about Mrs T’s attitude to risk in 2021. Mrs T’s submissions are that she would have invested in higher risk assets than those involved in

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the discretionary portfolio. The transcripts from 22 April 2021 show a mixed approach to risk – Mrs T said: • “I'm such a classic investor. Accordingly, moderate for sure. And probably conservative. No, definitely not aggressive. Because I invest in companies, mostly public companies that don't generate much income, but they are stable. So, how can this be interpreted? Conservative… I don’t like risks, I don’t like losing money. By and large, business people who do this all the time, they take risks. But that requires specific analytics. They have an analytical mind, they calculate these risks. Since I have a kind of passive approach, let’s say, and more in favour of reliability”. • When asked: “When you used to lose money in the market, how did you feel?” Mrs T chose the answer that said: “I felt uncomfortable, I had my investments at risk, it seemed like the end of the world and that I could lose everything.” • When asked “Imagine your portfolio is down 20%, what will you do?” Initially Mrs T chose the answer that she’d wait for three month and then move to a conservative strategy – but then after discussing how she would analyse the markets and make a judgment about what might happen, she changed her answer to switching to a more aggressive strategy. • When the adviser said: “you have a high tolerance for risk.” Mrs T said: “Well, actually, I do. Actually, I'm an extreme person” • Mrs T also said: “Anyone playing in real terms...the realities of the game are completely..... And then if I did it a little bit, you know, I'd sharpen my brain, I'd just get the hang of it. And my gut, my intuition would be, well, close to perfect. Right now I'm just playing, well, abstractly. Well, it is like... without any training sessions, let's put it this way.” I find some of that is contradictory – Mrs T goes from saying she’s risk averse to she is happy to take risk. While her initial opinion was very conservative, as the conversation goes on and she thinks more about loss and risk, she appears to apply a logical approach to the hypothetical situations she is asked about. I can see that she appreciates investing is a skill to be learned and that she also understands that panicking when losing money isn’t a practical approach - she would analyse the markets and asses. The rest of the conversation shows me that her experience to date was in blue-chip shares and bonds, and that she was willing to learn more about investing. However, in my view the adviser ought to have more thoroughly explored the contradictory answers to properly understand Mrs T’s tolerance for risk. They ought to have discussed the types of investments that could be made and the differences in them, compared to the investments Mrs T had made previously. Without that conversation having happened, it’s very difficult for me to pinpoint exactly what level of risk or types of investment Mrs T was willing to invest in at the time of the advice in 2021. I’m not persuaded it would be fair to rely on the investments made in 2024 to assess Mrs T’s attitude to risk in 2021. This is because it seems Mrs T was receiving advice from a third party in 2024, and I haven’t seen evidence of how her risk level was established at that time, or how it might have changed from 2021. Based on everything I have seen, I’m convinced the risk level of the execution only portfolio is not an appropriate comparison to rely on to show what she likely would have invested her money in or in what proportions. Instead, I think a fair measure would be a comparison with a benchmark index, which I’ve set out below under ‘Fair compensation’, that reflects the level of risk that I believe Mrs T was willing to take.

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UBS has paid Mrs T £100 for the time it took them to issue their final response letter. I’m satisfied that’s fair and nothing further should be paid for that single issue. I’ve considered Mrs T’s comments about compensation for the distress caused to her – but her comments in this regard are in relation to the account closure. I’ve considered whether it would be fair to award compensation in relation to distress caused by the unsuitable advice. I’m not persuaded any is warranted here, because Mrs T hasn’t lost any money. I appreciate at the time she made the complaint she hadn’t made any money in this portfolio either – but UBS did pay her the compensation immediately upon offering it. In my view that fairly mitigated the impact of any concern caused by the performance of the unsuitable investment. I can see Mrs T has asked for the fees she’s incurred for having professional help in bringing this complaint. Our service is free for Mrs T, and we offer a translation service as needed. I’ve not been given any submissions as to why Mrs T couldn’t use our service directly had she wanted to, particularly as UBS did uphold the complaint and offered compensation. I’ve considered Mrs T’s request that other fees ought to be refunded on top of the financial loss calculation. The ‘fair value’ calculation that I’ve set out below isn’t reduced by any charges as it’s designed to be a broad measure of the overall potential growth Mrs T could have achieved, had suitable advice been given. In my view in these circumstances there’s no need for a refund of fees on top of the overall loss calculation. Mrs T has raised other points about events that took place after the sale in 2021. I don’t consider that I need the further evidence from later reviews. The evidence I have from the sale in 2021 is enough to show what UBS did wrong. The redress I’ve set out covers the whole time period and so encompasses the later advice. I’ve considered the comments UBS has made about the amount they’ve paid already, which they’ve said was at a rate of 8%, and their concerns about the potential for double recovery here. I appreciate they’ve already made this payment, but I don’t agree with it as a fair method of calculating the potential loss, because I’ve found she would have invested the money and not left it as cash receiving an interest rate. However, the payment of the amount offered does need to be taken into account in the redress calculation as Mrs T has had the benefit of that money since June 2024, and I consider that treating it as a withdrawal, as set out below, is the fairest way to do that.” I then set out that UBS should compare the performance of the discretionary portfolio with the performance of the FTSE UK Private Investors Income Total Return Index, to assess whether there had been any financial loss. Replies to my provisional decision Mrs T didn’t reply by the deadline given. UBS replied and in summary said that they did not intend to challenge the findings and had carried out the calculations in three different ways, to account for the impact of the exchange rate between the GBP and USD currencies. In all three scenarios they found there was no financial loss, when compared with the value of the discretionary portfolio on 3 March 2026. 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. Having done so, as I’ve not received any further submissions from Mrs T and as UBS agree with the provisional findings, I see no reason to depart from the findings set out in my provisional decision (copied above) and I make them final.

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Fair compensation In assessing what would be fair compensation, I consider that my aim should be to put Mrs T as close to the position she would probably now be in if she had not been given unsuitable advice. I take the view that Mrs T would have invested differently. It is not possible to say precisely what she would have done differently. But I am satisfied that what I have set out below is fair and reasonable given Mrs T's circumstances and objectives when she invested. What must UBS do? To compensate Mrs T fairly, UBS must: • Compare the performance of Mrs T's investment with that of the benchmark shown below and pay the difference between the fair value and the actual value of the investments. If the actual value is greater than the fair value, no compensation is payable. • UBS should also add any interest set out below to the compensation payable. Income tax may be payable on any interest awarded. Portfolio name Status Benchmark From ("start date") To ("end date") Additional interest Discretionary portfolio Still exists and liquid FTSE UK Private Investors Income Total Return Index Date of investment Date of my final decision Not applicable Actual value This means the actual amount payable from the investment at the end date. Fair value This is what the investment would have been worth at the end date had it produced a return using the benchmark. Any withdrawal from the discretionary portfolio should be deducted from the fair value calculation at the point it was actually paid so it ceases to accrue any return in the calculation from that point on. The payment of compensation made in June 2024, not including the £100 awarded for distress and inconvenience, should be considered as a withdrawal. I don’t believe there was, but if there was a large number of regular withdrawal payments, to keep calculations simpler, I’ll accept if UBS totals all those payments and deducts that figure at the end to determine the fair value instead of deducting periodically. UBS must pay the compensation within 28 calendar days of the date on which we tell it Mrs T accepts my final decision. If UBS fails to pay the compensation by this date, it should pay 8% simple interest per year

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on the loss, for the period following the deadline to the date of settlement. Why is this remedy suitable? I have decided on this method of compensation because: • Mrs T wanted capital growth and was willing to accept some investment risk. • The FTSE UK Private Investors Income Total Return index (prior to 1 March 2017, the FTSE WMA Stock Market Income total return index) is a mix of diversified indices representing different asset classes, mainly UK equities and government bonds. It would be a fair measure for someone who was prepared to take some risk to get a higher return. • Although it is called income index, the mix and diversification provided within the index is close enough to allow me to use it as a reasonable measure of comparison given Mrs T's circumstances and risk attitude. My final decision I uphold the complaint. My decision is that UBS AG should pay the amount calculated as set out above. UBS AG should provide details of its calculation to Mrs T in a clear, simple format. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs T to accept or reject my decision before 17 April 2026. Katie Haywood Ombudsman

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