Quilter Financial Services Limited · DRN-6019945

The complaint Mrs S complains that Quilter Financial Services Limited deducted ongoing advice charges from her personal pension plan but failed to provide the service. Mrs S is represented in this complaint, but for ease of reading I’ll just refer to Mrs S. What happened The background to the complaint was comprehensively set out by the investigator in his view so I won’t replicate it all here. Briefly Mrs S set up a pension plan in 2015 with a firm trading as “Pensionlite”. From May 2017 Pensionlite Limited became an appointed representative of Quilter Financial Services Limited (“Quilter”), so this decision only focusses on events which Quilter is responsible for. Mrs S says she never actually met the Quilter financial adviser, as her husband dealt with everything on her behalf. There was a telephone fact find meeting in April 2018 which updated Mrs S’s financial and personal circumstances, objectives, investments and so on. This noted she has an OMW personal pension and a smaller Prudential personal pension. Mrs S signed to indicate she agreed to Quilter’s ongoing advice service and accepted the ongoing advice charges (“OACs”). She’d previously been paying OACs to Pensionlite, and these continued to be paid to Quilter from March 2018. In June 2018 Mrs S’s attitude to risk (“ATR”) was assessed as “dynamic” and subsequently reduced to “moderate”. Quilter arranged annual reviews each year until 2023. In November 2023 Mrs S told Quilter to cease the OACs as she no longer wished to receive the service. And in 2024 Mrs S complained to Quilter that it should refund the OACs she’d paid as reviews hadn’t taken place every year. Quilter responded to say it was satisfied it had provided an appropriate service to Mrs S until 2023 when the fee for the ongoing advice service ceased. Mrs S referred her complaint to this service in March 2025, where it was considered by one of our investigators. He didn’t think Quilter needed to provide a fee refund, as he could see reviews had taken place every year, apart from 2020 when a review was offered, but was declined by Mrs S. Mrs S initially disputed a review had taken place in 2019 but later conceded that she had signed Quilter’s “Authority to Proceed” document in January 2019 which confirmed the review. But she still felt that Quilter should refund the fees for 2023 until November when she asked for the OACs to be turned off. So she asked an ombudsman to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and

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reasonable in the circumstances of this complaint. Having done so I agree with the investigator’s conclusions for broadly the same reasons. Quilter has provided copies of documents Mrs S signed when she was a client of Pensionlite prior to that firm becoming an appointed representative of Quilter. So I think she was familiar with ongoing advice and what it entailed. It’s important to recognise financial advice is not free. Firms are entitled to charge for their professional knowledge and expertise, and as a general principle if a consumer is being charged for a service, they should receive it. As the investigator has explained, the regulator’s rule COBS 6.1A.22 allows that a firm can charge for ongoing advice provided: 1. the charge is in respect of an ongoing service for the provision of personal recommendations or related services and: (a) the firm has disclosed that service along with the adviser charge and (b) the client is provided with a right to cancel the ongoing service, which must be reasonable in all the circumstances, without penalty and without requiring the client to give any reason; The Financial Conduct Authority (“FCA”) issued a Fact Sheet to financial advisers in 2012, following the Retail Distribution Review which introduced new rules about adviser charging. Financial advisers were required to have “robust systems and controls in place” to ensure their clients receive the ongoing service they’d agreed to provide. These documents may have been provided when Mrs S first became a client of Quilter, but I can see that each “Authority to Proceed” form Mrs S signed, the earliest of which I’ve seen is January 2019, show she was given a copy of Quilter’s “Guide to our Service” and Terms of Business, which I’d expect to include their charging structure. The ongoing advice fee, which includes the entitlement to an annual review, is paid in monthly instalments, so one year’s fee is divided into twelve and deducted from the account each month. In 2015 Mrs S was paying 0.75% for ongoing advice, but this was reduced to 0.50% prior to the adviser becoming an AR of Quilter, and this fee was honoured by Quilter. The servicing fee of 0.50% was mentioned in a letter from OMW in July 2018 confirming her investment in their Collective Retirement Account. And a letter to Mrs S dated 16 March 2020 following a meeting with her husband explained that Quilter’s fee for combined fund values of between £200,000 to £299,999 would normally be 0.65%, so her fee of 0.50% was a 0.15% discount, saving over £236 per year based on the current fund value. Quilter has also confirmed it only received fees based on the value of Mrs S’s OMW Retirement Account, not the Prudential plan. So I think Mrs S was fully aware throughout of the fees she was paying. Mrs S may have had little direct contact with the adviser, but that doesn’t mean she didn’t receive the benefit of the advice. She had authorised her husband to liaise with the adviser on her behalf and to provide details of her financial circumstances when he met the adviser for his own reviews. But I can see information and updates were provided direct to Mrs S, she didn’t need to rely on her husband to find out what had been discussed and agreed at meetings she didn’t attend. The joint fact find was completed in April 2018 without Mrs S’s personal input, but it specifically referred to Mrs S wishing to access the tax-free lump sum on both her pensions to provide their daughter with a house deposit. And I can see the confirmation that she was a “Dynamic Investor” was sent to her in June 2018, suggesting she was involved in completing Quilter’s questionnaire to assess her ATR.

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Mrs S personally signed Quilter’s “Authority to Proceed” letters, the starting point for that year’s annual review process, in January 2019, January 2020, March 2021 and April 2022, suggesting she was expecting annual reviews and saw the value of them. And although she may not have been present at the meetings, she was sent letters addressed personally to her about the reviews in February and May 2019, and April and May 2021, in which the adviser recommended a fund switch to one with slightly lower charges. In July 2022 Quilter wrote to Mrs S confirming her ATR had reduced to “moderate” and that she would continue to withdraw £20,000 from her OMW plan. But the adviser warned that withdrawals at that level were unsustainable and would deplete the fund by age 64. And in November 2022 Quilter sent Mrs S a letter as a follow-up to the review, confirming her “Milestone report pack” had been discussed, and that the next review would be in November 2023. Despite signing the authority to proceed in January 2020 and the fact-find of her circumstances being updated in February 2020, Mrs S declined the annual review in 2020, against the adviser’s recommendation. The adviser wrote to her in March 2020 stressing the importance of regularly reviewing the suitability of the plan, fund choices and income level (if any), explaining Quilter did “not perceive Flexi-Access Drawdown to be a one-off decision”. Presumably in view of concerns about Mrs S depleting her fund too soon, the adviser had done some research into annuities, explaining that currently she would be able to purchase an annuity providing annual income of around £9,770. But based on mid-range growth of 2.42%, if she delayed for ten years she could purchase an annuity providing £12,100 a year. I think this shows that even though Mrs S had declined the formal review, the adviser had invested some time into considering the appropriateness of the plan and had suggested an alternative way to provide an income in retirement. So there’s no justification for a refund of the OACs for 2020 as the adviser clearly demonstrated he had commenced the review process, had done some research into a more secure alternative to drawdown for Mrs S to take her pension benefits. And I’m satisfied would’ve provided an annual review service to Mrs S had she been willing to engage with the process. I can’t see Mrs S signed an “Authority to Proceed” form in 2023, but I think she did initially participate in the review process that year. The fact-find notes her as an attendee at a telephone meeting with the adviser on 2 February 2023, the timing of which is in line with previous years where the review process starts in January/February and the review meeting takes place in April/May. Unusually, Mrs S was noted as the “client” rather than the “partner”, which may be because her pension planning was to be the main focus of that meeting, as she intended taking benefits from the Prudential plan later that year. Based on this, the adviser would’ve had no reason to think Mrs S didn’t want to retain his services for the remainder of the year and beyond. In 2025 the Financial Conduct Authority issued findings of a review of Ongoing Financial Advice Service and the circumstances when firms should refund fees for an ongoing service having not been provided. This guidance said that “Where a firm has been ready, willing and able to provide suitability reviews, but a client has consciously declined the service in any given year, we consider it less likely that redress will need to be paid. Where the client has declined the service over a number of years, firms should discuss with the client whether continuing with the service is still in their best interest”. It also gave examples of good practice, which included having “Effective systems and adequate resources to ensure suitability reviews were scheduled and offered as agreed. Ensuring Clients’ circumstances, objectives, attitude to risk and capacity for loss were up to date. And Risk profiles, charges and performance of existing investments were reviewed and recorded to make sure they remained suitable or identified whether an alternative recommendation was required”. I think Quilter has demonstrated that since 2018 the ongoing advice service provided to Mrs S was in line with the regulator’s expectations. It had systems in place to ensure clients were

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invited to annual reviews, and that in preparation for such reviews the adviser was taking account of Mrs S’s circumstances and considering whether her current arrangements remained suitable for her. Mrs S declined a review in 2020 but then did have reviews in 2021 and 2022, which suggests she didn’t want them to be permanently stopped at that point. Had Mrs S declined a review for a second consecutive year I’d have expected Quilter to ask whether she wished to continue receiving ongoing advice, as the FCA recognised that firms need to have some engagement with their client, in order to carry out a review. But it doesn’t follow that a refund of OACs is appropriate as I’m satisfied Quilter made “reasonable and proportionate attempts” to engage with their client without success. COBS 6.1A.22A (2) sets out the rules on cancelling OACs. Consumers are permitted to cancel the service without penalty, and the notice period firms insist on (if any) must be reasonable. Firms may not make a charge for cancellation, but they are entitled to retain the proportion of the annual fee for the service already provided to the consumer. It looks like there was no follow up meeting after the February 2023 call, and later that year Mrs S decided to cease the OACs as she no longer wished to receive ongoing advice. But I don’t consider it to be fair or reasonable for her to be refunded that year’s OACs as the adviser had clearly been “ready, willing and able” to carry out the review, and had invested some time into the planning process. I’m satisfied Mrs S was invited to an annual review in 2023, she participated in the fact find call in February in preparation for the review at which her own retirement planning was to be the focus. And there’s no evidence she expressed dissatisfaction with the adviser, or with the service she’d received to date. But if she was unhappy she could have switched off the OACs at any point prior to November 2023 when she actually did. I see no reason to think Quilter wouldn’t have provided Mrs S with a review of the suitability and performance of her pension plan in 2023 had she wanted one. So I don’t consider a fee refund to be necessary. My final decision I don’t uphold this complaint and make no award. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs S to accept or reject my decision before 8 April 2026. Sarah Milne Ombudsman

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