Succession Wealth Management has been ordered to pay compensation despite arguing it should not be responsible for the advice that was complained about.
In an upheld ruling, the Financial Ombudsman Service says Succession should have advised the complainants, Mr and Mrs D, to use their yearly Isa allowance to avoid a potential capital gains tax liability.
However it is not satisfied that Mr and Mrs D were advised to do this and the adviser should have at least made them aware of the possibility of using their Isa allowance.
In August 2012 Succession Group bought Mellors Associates and its clients were then novated into Succession Wealth Management.
Succession says Mr and Mrs D were allocated to a new adviser but they did not re-engage its services after the takeover of Mellors Associates.
It argues it was not liable for the advice as the sale and purchase agreement from August 2012 does not state it would take responsibility for advice given by, or complaints against, Mellors Associates.
However, Mr and Mrs D have provided numerous pieces of evidence such as emails to show they had re-engaged Succession Wealth and have been getting ongoing advice.
While Mr and Mrs D have not suffered a financial loss as result of Succession Wealth’s actions they are now aware of the potential capital gains tax liability.
A FOS investigator recommended £500 compensation for the upset caused and said Mr and Mrs D may wish to seek independent financial advice.
If they do, Succession Wealth should cover the cost of this up to £1,000, subject to Mr and Mrs D supplying a valid invoice.
Succession Wealth disagreed with the investigator’s view and said it was confused about the FOS’s jurisdiction as the event referred to pre-dates its regulatory permissions and trading date – February 2014.
It would also like to know how the investigator arrived at £1,000 figure for the adviser’s fee and £500 compensation.
The matter was passed on to ombudsman Dara Islam who says Succession Wealth’s services were engaged from at least June 2013, and it is the correct business against whom the complaint is made.
Islam orders Succession Wealth to Pay Mr and Mrs D £500 compensation for the upset caused and £1,000 for financial advice subject to the production of a valid invoice.
A Succession Wealth spokesman says: “It is right there is an ombudsman to deal with matters like this and we will abide by the decision.”