The Financial Ombudsman Service has upheld a complaint against St James’s Place for giving unsuitable advice to transfer an Isa from an existing provider to SJP.
A final decision by the FOS, published last week, upheld an adjudicator decision in favour of the consumer, who complained she had lost income and capital and was disappointed with SJP’s advice.
It says the client approached SJP in 2011, with the aim of increasing the income from her Isa and an investment bond.
The adviser recommended the Isa be transferred from the existing provider to SJP.
The suitability letter said the client was attracted to SJP’s approach to investment management, and noted an initial charge would be incurred as well as higher ongoing charges.
Ombudsman Doug Mansell says SJP’s approach to investment management would be a “tenuous basis” for switching provider, and the risks associated with the higher charges were not made “fully obvious” to the client.
He says it is also not clear how the change of provider would achieve the client’s aim of improving income, and concluded the advice was unsuitable.
The decision notice says SJP should pay the client the difference between the value of the current Isa and the value it would have had if it had not been transferred.
A spokeswoman for SJP says this is yet to be calculated.
The spokeswoman says: “We are disappointed the client felt let down, but we believe there has been no detriment and their Isa remains invested with us.”
Pilot Financial Planning director Ian Thomas says: “Advisers need to be very careful with transfers. If costs are higher then there needs to be strong other grounds for recommending the transfer.”