St James’s Place (SJP) has been ordered by the Financial Ombudsman Service (FOS) to pay compensation to a client with Alzheimer’s for unsuitable advice on an ISA transfer.
According to our sister publication New Model Adviser, the adjudicator ruled that the general strengths of SJP’s investment process were not enough to prove a 'tangible benefit’ to the client in the absence of a more specific analysis of his situation.
The complaint was brought by a woman with power of attorney for the client, who was called Mr G in the final decision.
She claimed an SJP appointed representative's advice to transfer two ISAs was unsuitable because the firm was unable to provide evidence that holding investments with SJP would yield better value for the client than keeping the investments where they were.
A provisional decision issued by the FOS last October found in favour of the client.
SJP contested this, and set out why its approach to investment management would be beneficial to the client. SJP cited seven reasons:
- control of the investment mandate;
- access to data about the funds it managed;
- flexibility to replace a manager at short notice;
- members of the investment committee are selected for particular expertise;
- the investment committee contains independent experts not directly employed by SJP;
- SJP employs a behavioural psychologist to sit in on manager monitoring meetings, who tells the committee when a manager shows ‘unusual behaviour traits’ to certain areas of questioning;
- SJP has an exclusive relationship with an independent investment consultancy firm and several fund managers
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