TenetConnect must compensate a client who was not told about charges on investments in a self-invested personal pension.
According to a Financial Ombudsman Service decision, Mrs H complains her financial adviser LEBC, which was an appointed representative of Tenet until August 2017, did not inform her about charges that would apply to investments made in her Sipp.
In March 2016, Mrs H’s adviser contacted the provider about the charges and on 24 March 2016 the provider replied to the adviser explaining the charges and the charging period for the investments.
It explained information about this would have been available when it made the investments for Mrs H online.
In May 2016, Tenet explained it could not find evidence that Mrs H was given the correct charging structure and offered to refund £972 of charges.
Mrs H did not accept this first offer as she understood she’d been charged yearly and so asked for an additional year’s charge.
In June 2016, Tenet agreed to pay an additional year and offered a total settlement of £1,457. It also offered Mrs H a free financial review which she had to take up within six months.
Mrs H accepted the second offer and signed a settlement form in full and final settlement of the complaint.
She then contacted the adviser about the free review in December 2016 and, during the review process, Mrs H was told she’d incur a further annual charge and charges for moving her money.
In February 2017, Mrs H contacted Tenet about this and argued these charges should also be refunded.
In March 2017, Tenet said it believed Mrs H was now fully informed about the charges so no additional offer would be made.
Mrs H wasn’t happy and contacted the FOS in May 2017. The investigator felt it could not look into the complaint because it wasn’t bought within six months of the final response letter.
Mrs H didn’t agree and the complaint was reviewed by ombudsman Melissa Grove who ruled in favour of Mrs H.
Grove says Tenet accepts there’s no evidence Mrs H was given information about the charges and it made an offer to return ‘the fees you have or will incur’.
But Tenet has only returned two out of the three annual charges Mrs H incurred and has not returned the transaction fees she will incur for removing her money from the investment.
Tenet said Mrs H would have still incurred charges had she made other investments but forgot to take these off the initial offer.
Grove says: “I think it is reasonable to consider what Mrs H would’ve done had she known about the fees. Mrs H says she would’ve made investment choices that reduced the amount of fees incurred.
“She’s said she would’ve stayed in a Sipp bank account (in the inner ring) – I have no reason to doubt this.
Grove adds: “The information I’ve seen in the provider’s literature suggests there are no fees for this. Tenet hasn’t provided evidence Mrs H would’ve acted differently.
“Tenet also haven’t given me evidence of the actual fees they think Mrs H may have incurred, they’ve estimated charges. So I’m not persuaded by this evidence.”
To address this Tenet should fulfil the initial offer and pay the additional annual charge and transaction fees Mrs H will incur.
Therefore Tenet should pay Mrs H £485 with 8 per cent interest from the date Mrs H paid this fee and also refund the additional transaction fees of £60 that Mrs H will incur for removing her funds from the investment.
LEBC and Tenet were not available for comment at the time of publication.