BRADLEY FINANCIAL SERVICES LTD · DRN-5892246

The complaint Mrs Y has complained that despite having had fees deducted from her Individual Savings plan (“ISA”) she hasn’t received any ongoing advice reviews or service from BRADLEY FINANCIAL SERVICES LTD (“BFSL”). What happened In 2010 Mrs Y was advised by CHS Financial Planning (“CHS”) to invest in a stocks and shares ISA with Invesco. The investments were purchased using Standard Share Class shares which were subject to a fund-based renewal commission of 0.5% that was deducted from the Invesco ISA as part of the annual management charge (AMC) and paid to the adviser at CHS. In 2014 BFSL took over CHS and the commission payments were redirected to BFSL as the new servicing agent on the ISA. In 2024 Invesco amended the share class of Mrs Y’s ISA investments from ‘Standard Share Class” to ‘No Trail Share Class” which meant the 0.5% deducted as part of the AMC ceased. When Mrs Y was told about this amendment, she complained to both Invesco and BFSL that fees had been charged from her ISA yet no service or advice had been provided in return. Mrs Y made her complaint to BFSL using the email [email protected] on 13 November 2024. The complaint against Invesco has been dealt with separately so I will not comment on that any further. Mrs Y received no acknowledgement or response to her email to BFSL and so referred the complaint to this Service where it was assessed by one of our investigators. He didn’t uphold the complaint on the basis that the contract was started before the Retail Distribution Review (“RDR”) had come into effect in 2012 (explained in more detail below) and so there was no contractual obligation for BFSL to provide ongoing advice or service and the commission payments could continue as they were. Mrs Y didn’t agree with the assessment. So as no agreement could be reached the complaint has been passed to me to decide. 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. I’ve taken into account relevant: law and regulations; regulatory rules; guidance and standards; codes of practice; and (where appropriate) what I consider to have been good industry practice at the relevant time.

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Where the evidence is incomplete or inconclusive, I’ve reached my decision based on the balance of probabilities – in other words, on what I think is more likely than not to have happened given the available evidence and wider circumstances. Firstly, I would like to clarify that the reason Mrs Y didn’t receive a response to her complaint submitted on 13 November 2024 by email was because the email address used is not the correct address for BFSL. Its correct email address can be confirmed on the Financial Conduct Authority website, and it is clearly a different one to the address Mrs Y used. Turning now to the main complaint point. As above Mrs Y’s ISA started in 2010 and this date is important because before 31 December 2012 commission used to be paid by the product provider, in this case Invesco, to the adviser as a set percentage of the amount invested. This was known as trail commission and is usually considered to be deferred initial commission. The commission payments were built into the contract at inception and trail commission was generally around 0.5% deducted as part of the AMC. Also advisers did not have to provide an ongoing service or advice in order to earn this commission. However, on 31 December 2012 the rules governing how advisers are paid changed across the industry. This was known as the RDR, as mentioned earlier in this decision. The changes meant that commission payments to advisers were prohibited in all new retail investment products. However, this charge couldn’t be applied retrospectively and would only apply to investments that pre-dated the introduction of the RDR upon a “triggering” event. But for Mrs Y’s ISA there was no such event until 2024 and so the obligation that came from the RDR didn’t apply to her investment. Therefore, the commission to the advisor that was being deducted from her investment could remain in place without that adviser needing to do anything such as providing a regular review service. And when BFSL took over CHS Financial Planning, the renewal commission payments became payable to BFSL but there was still no obligation for ongoing advice or service to be provided. Whilst I can appreciate this could seem unfair this was the situation within the financial industry at the time Mrs Y started her investment. And RDR attempted to rectify any perceived unfairness stemming from the issue around the paying of ongoing commission. It’s just the case that for Mrs Y the RDR didn’t apply to her investment. Overall, therefore as Mrs Y’s investment started before the RDR came into force, and there was no contractual obligation for BFSL to provide ongoing advice or service, there is no requirement for the commission payments to be refunded. My final decision For reasons explained above my final decision is that I don’t uphold this complaint and I make no award. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs Y to accept or reject my decision before 21 April 2026. Ayshea Khan Ombudsman

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