St. James's Place Wealth Management Plc · DRN-6140175

The complaint Mr R complains through a professional representative about the advice he received from St. James's Place Wealth Management Plc (SJP) to transfer his Self-Invested Personal Pension to a SJP retirement plan. Mr R thinks the advice is unsuitable and he has lost out financially due to this. What happened I set out the background to this complaint and my provisional findings in my provisional decision, which is included below and forms part of this decision: “Mr R received advice from SJP in 2014. Following this, he transferred his SIPP to SJP. At the time of advice, a fact find was carried out by SJP which noted the following about Mr R’s circumstances: • Mr R was aged 49 and married with two dependent children. • Mr R was employed earning approximately £23,700 per year. • Mr R had 4 pensions: ▪ A SIPP (the subject of the transfer advice) which had a fund value of approximately £74,182.92. ▪ Standard Life Occupational Pension with a fund value of £20,700.60. ▪ Another defined benefit scheme. ▪ His current employer’s Occupational Pension scheme. Both Mr R and his employer were contributing to this. • Mr R had a medium attitude to risk. Mr R’s main objectives were noted as preparing for retirement at age 65 if possible and moving to a provider who could offer him regular face to face advice. In the suitability report, dated 6 November 2014, SJP recommended Mr R transfer his Legal & General SIPP to a SJP Retirement plan with ongoing advice to be supplied – Mr R agreed to this recommendation. More recently Mr R made a complaint through a professional representative to SJP, the original complaint was quite generic. SJP responded to the complaint, it didn’t think the advice had been unsuitable and it set out that Mr R had received regular reviews. The professional representative then brought the complaint to our service. It was now a bit more specific to Mr R’s circumstances and the key points of complaint were, the SJP plan had to outperform the SIPP and Mr R would not have agreed to this if it meant he was financially disadvantaged. The employer’s scheme which was available to receive a transfer had lower costs but the adviser recommended an SJP scheme instead.

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Our investigator looked into matters and upheld the complaint. She said the additional cost didn’t have a good reason when compared to the employer’s scheme which was 1.13% cheaper. She also said some of the objectives set out where stock generic points that didn’t apply to Mr R’s circumstances, such as the choice of more funds. The SIPP already had many funds to choose from. SJP responded to say: • The adviser was restricted to what products he could have offered and to advise a transfer to the Occupational Pension Scheme would’ve been outside of her permissions. So it was wrong to suggest this is what they should have done. • This wouldn’t have met Mr R’s primary objective in any event which was to receive ongoing service and advice. • Mr R did not benefit from advice from the ceding scheme or his employer’s scheme. • Mr R did not want to choose his funds, this was part of the offering, it would be chosen for him. • The scheme transferred from in terms of an AMC perspective and after taking out the ongoing advice charge was only 0.23% more expensive. But the SIPP had external fund charges applied to it which were significantly higher than the SJP plan recommended. Meaning that in total the critical yield shows the outperformance as only 0.05% and Mr R would now be receiving ongoing advice whereas he wasn’t before within the SIPP. So it didn’t think it could be concluded the advice was unsuitable. Our investigator said the likelihood of over performance compared to the employer’s scheme wasn’t discussed or set out – despite it being acknowledged it was an option for him. And that the additional costs weren’t reasonable given Mr R’s priorities at the time which were to consolidate his pension for simplicity and be more prepared for retirement. Also the investigator didn’t think a Stakeholder Pension with lower costs was presented fairly to Mr R. What I’ve provisionally 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. And having done so, I’m minded to say I disagree with the outcome reached by the investigator. I’ll explain why. The investigator’s view appeared to at least initially be formed on the basis that the adviser ought to have told Mr R to transfer his SIPP to his current employer’s scheme. But as SJP have said, she couldn’t do that as she was tied to SJP products. I note at the time of advice Mr R signed to say he had received a copy of the details of the key facts about its costs and services document – and SJP has sent us a copy of the form from the time. And on this form it had a box seemingly pre-selected explaining the advice was restricted. I also note that the complaint doesn’t state that Mr R wasn’t aware of SJP’s restricted advice model, so I am of the view Mr R would likely have been aware of the nature of the advice. Furthermore, the suitability report makes passing reference to the adviser explaining this to Mr R in their meeting and that Mr R had been supplied with all the required information about the services offered by the adviser and its arrangements with SJP. Bearing in mind the adviser couldn’t advise Mr R to transfer to his OPS as they weren’t authorised by SJP to do so, I have firstly looked at a comparison between the existing arrangement and the SJP product recommended. One of Mr R’s main objectives was to move to a provider that would provide regular face to face reviews and financial advice. And he was looking to receive active management from his funds and the potential for improved growth. I’ve seen nothing to suggest Mr R couldn’t have achieved this within his existing personal pension but of course the SJP adviser due to the tied nature of the advice, couldn’t carry out that service for him if he remained in the existing SIPP. The adviser did state that staying where he was, was an option for him but that he was attracted to the SJP approach and of course he could then receive the ongoing advice offering from the SJP adviser. So

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as these objectives (apart from the investing with SJP) could be met within his scheme, although he would have to seek out a different adviser, I think the most important consideration is the costs of the two arrangements as this would have the biggest impact on the growth likely to be achieved. Whilst the SJP annual management charge plus the ongoing advice fee meant that the plan was more expensive than the existing schemes annual management charge by 0.48%, the existing scheme had much larger external management costs. Taking all the costs into account, the critical yield shows overperformance of only 0.05% was required to match the existing scheme. And this included the benefit of ongoing advice in favour of the SJP scheme. I therefore, don’t think I can conclude the advice was unsuitable. I also note Mr R had regular meetings as agreed, so he did receive this additional benefit. The adviser did consider Mr R’s other options, they looked into whether Mr R could transfer into his current OPS. And set out the difference in costs between that and the SJP arrangement, this was 1.13%. The adviser is required to consider the investor’s best interests, and whilst they couldn’t advise Mr R to transfer to his occupational pension scheme, I would expect that they signpost that he could and the key differences. The adviser gave him enough information to make an informed choice in my view. And I think Mr R, at the time genuinely did place value on receiving ongoing meetings and advice on his retirement planning. I don’t think the adviser made any misleading statements about the ability of the SJP plan to outperform the charges difference between it and the OPS. The recommendation also gave him important information about remaining in his other OPS schemes. Ultimately I think the advice was in Mr R’s best interests within the defined boundaries of what the adviser could recommend. It improved his immediate situation regarding his pension, receiving ongoing advice for essentially no extra cost when compared to his situation before. Information about his other options was signposted and I think Mr R received enough information to make an informed decision. So in conclusion, I don’t intend to uphold this complaint.” In response to this, Mr R’s representatives said: “although a SJP adviser can only recommend SJP products, they have a responsibility to ensure that they are making a recommendation which does not unnecessarily cause financial detriment to their client. As such, they cannot recommend the ‘least worst’ option available from their product offering. We believe that the adviser should have encouraged Mr R to explore in greater detail the benefits his workplace scheme transfer would have offered him, and the administration that would have been provided by the scheme to handle the transfer on his behalf.” 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. And having done so I see no reason to depart from the findings set out in my provisional decision. Aside from the added value of receiving ongoing advice, the plan recommended to him wasn’t materially anymore expensive. And he got the ongoing advice on top of that. I don’t agree that the adviser recommended the least worst option, they recommended the best option they could from within the boundaries of what they could advise upon. The adviser had to act in Mr R’s best interests and it would be difficult to say they did not in relation to a comparison between his existing plan and what was recommended. The other factor of course was the existence of his workplace scheme, which was cheaper but the adviser did set this out. Mr R was already a member of this scheme so would’ve had some knowledge about it. The adviser gave Mr R information about the overperformance

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required from SJP to match it each year and explained it was an option to transfer his funds into this scheme. I think the adviser did provide a sufficient amount of information about the scheme to Mr R to make a comparison. It was not a defined benefit scheme and it looks like he was already getting the maximum matched contribution, and the adviser recommended Mr R remain an active member of that scheme. What Mr R didn’t have within his retirement provision plan, was an adviser. Mr R came to SJP not long after taking out his new employer’s plan (which was to remain in place) and it seems Mr R previously did have an IFA attached to the transferred plan – and it appears he valued this service hence contacting SJP. So, Mr R was aware that he could get another independent financial adviser in place but chose to speak to SJP and accept their restricted offering. Ultimately, looking at the circumstances here, whilst Mr R did have a cheaper plan available – he was given information about that plan. The adviser could only recommend an SJP product and the alternative was to recommend not transferring. They couldn’t recommend a transfer to the OPS. As the recommendation put Mr R in a likely better position than he’d started and it seems Mr R did value the chance to receive ongoing advice, I’m of the view that the adviser acted in Mr R’s best interests. My final decision For the reasons explained above and in my provisional decision I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr R to accept or reject my decision before 9 March 2026. Simon Hollingshead Ombudsman

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