Bruce Bennett, trading as Beneficial Financial Management · DRN-6168646

The complaint Mrs H (acting as trustee and beneficiary) and T (acting as trustee) complain that Bruce Bennett, trading as Beneficial Financial Management, (‘BB’) has not provided ongoing services and regular reviews of the pension portfolio despite receiving regular fees to do so. As most of our correspondence has been with Mrs H, for simplicity the decision will largely refer only to her rather than to T. What happened Mrs H is a trustee and the beneficiary of a pension portfolio that was held with a provider I’ll call ‘Firm N’. Mrs H has explained that this pension (a Small Self-Administered Scheme, ‘SSAS’) was originally her husband’s and she inherited it when he sadly passed away. The Firm N portfolio investments were arranged by a person I’ll call ‘Adviser Y’. I understand Adviser Y left the regulated business they were previously working for and introduced Mrs H to BB in 2016. BB has separately confirmed that it entered into an agreement with Adviser Y, who was by that time unregulated, in 2016 that they would act as an introducer to BB. BB became the servicing agent, and began receiving ongoing advice fees, in around June 2016. In January 2018 Mrs H asked for the Firm N investment to be switched to cash. In July 2024 Mrs H emailed BB to say she’d closed the Firm N account and it had told her that when BB had been the adviser during the period June 2016 to June 2024, she’d paid BB adviser fees totalling about £24,522. And she asked BB to explain what services she’d received for these fees. Following further correspondence in which BB explained that it was working on her request, Mrs H complained to BB in August 2024 that its adviser fees were unjustified and excessive, especially as the Firm N portfolio had mainly been invested in cash. She thought its fees had caused her a financial loss and reduced the returns on the Firm N portfolio. And she said she’d not signed the Service and Payment Agreement form; that signature was not hers. As BB hadn’t provided a final complaint response within the time it was entitled to, Mrs H referred the complaint to the Financial Ombudsman Service. She added that prior to becoming BB’s client, she’d received annual reviews and advice from her former adviser and BB was engaged to provide the same, but she’d never received these from BB despite paying for it. So she wanted BB to refund the fees and compensate her for any lost investment growth. Mrs H also told us that since 7 June 2024 there was no servicing adviser attached to the Firm N account and so no adviser fees had been paid since then, when the Firm N investments were surrendered and the proceeds moved to the pension’s associated bank account. For its part, BB told us that the time passed and Mrs H’s suggestion of fraud meant that this complaint didn’t fall within our Service’s jurisdiction. But in any case, it didn’t agree that Mrs H hadn’t received an ongoing advice service; it said she’d received its ‘bespoke rebalancing service’ for a time, with quarterly reports and rebalancing suggestions being provided. BB

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also provided us with additional information about an ongoing dispute it had with Adviser Y which it said had resulted in it only having access to limited information. It also said that Adviser Y was supposed to have assisted with the provision of ongoing services. One of our Investigator’s considered the complaint. Regarding jurisdiction, he said the time passed meant we could only consider part of this complaint – whether the services BB had been paid for from August 2018 onwards had been provided or not. And having considered this part of the complaint, he thought it should be upheld because he’d not seen any evidence that BB had provided Mrs H with the agreed ongoing advice. So, he thought all the fees BB had charged her for ongoing advice between August 2018 and June 2024 should be refunded and set out how BB should put things right. Mrs H and T accepted the Investigator’s view and didn’t provide any further comments or evidence for consideration. But despite being provided with the opportunity, BB didn’t provide any response to the Investigator’s view. As agreement couldn’t be reached, this complaint has been passed to me for a decision. What I’ve decided – and why Preliminary point - jurisdiction The Financial Ombudsman Service isn’t free to consider every complaint brought to us. Our ability to consider complaints is set out in Chapter 2 (DISP 2) of the FCA’s Handbook of Rules and Guidance. BB says this complaint doesn’t fall within our jurisdiction because Mrs H has suggested the signature on the Service and Payment Agreement form is ‘fraudulent’. But the DISP rules don’t say that such a suggestion by a consumer means a complaint would fall outside our jurisdiction. And in any case, it appears that Mrs H is no longer making this suggestion, as I note she has accepted the Investigator’s view of this complaint in which he explained why he thought that signature was hers. BB also says this complaint has been made too late as clients were made aware of the costs and charges on a quarterly basis. DISP 2.8.2R sets out the relevant time limit rules; it says that, unless the business consents: The Ombudsman cannot consider a complaint if the complainant refers it to the Financial Ombudsman Service: (2) more than: (a) six years after the event complained of; or (if later) (b) three years from the date on which the complainant became aware (or ought reasonably to have become aware) that he had cause for complaint; unless the complainant referred the complaint to the respondent or the Ombudsman within that period and has a written acknowledgement or some other record of the complaint having been received; unless:

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(3) in the view of the Ombudsman, the failure to comply with the time limits…was as a result of exceptional circumstances; In his view of this complaint, our Investigator has already explained to both parties why he thought we could consider the ongoing advice charges from August 2018, but not the earlier one as these had been complained about too late under the time limit rules. As I say, Mrs H and T have accepted what the Investigator said. But I note that BB didn’t provide a response. Despite not telling us so, it may be that BB accepts that the part of the complaint about ongoing advice charges from August 2018 has been made in time. But for completeness, I have independently considered the matter of time limits. And having done so, I have myself reached the same conclusion about this as the Investigator did, and for broadly the same reasons. Namely, that the complaint was made more than six years after the earlier ongoing advice charges, and more than three years after Mrs H ought reasonably to have been aware she had cause for complaint about them. But that the complaint was made within six years of the reviews that were due from August 2018. Therefore, I’m satisfied we can only consider the ongoing advice charges from August 2018. So I’ve moved on to consider the merits of this part of the complaint. The merits 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, regulator’s rules, guidance and standards and codes of practice - many of these are found in the Financial Conduct Authority’s (‘FCA’) handbook under the Principles for Businesses (‘PRIN’) and the Conduct of Business Sourcebook (‘COBS’). I’ve also thought about what I consider to have been good industry practice at the time. And where the evidence is incomplete, inconclusive or contradictory, I reach my conclusions on the balance of probabilities – that is, what I think is more likely than not to have happened based on the available evidence and the wider surrounding circumstances. The following also provides useful context for my assessment of the ongoing services that ought to have been provided. In 2014, the FCA produced guidance in the form of a factsheet titled “For Investment advisers - Setting out what we require from advisers on how they charge their clients”. The factsheet said: “Ongoing charges should only be levied where a consumer is paying for ongoing service, such as a performance review of their investments, or where the product is a regular payment one. If you are providing an ongoing service, you should clearly confirm the details of the ongoing service, any associated charges and how the client can cancel it. This can be written or orally disclosed. You must ensure you have robust systems and controls in place to make sure your clients receive the ongoing service you have committed to.” The factsheet, published in late 2014, didn’t mark a change to the rules firms like BB were already expected to follow. Rather it re-enforced or reminded firms of the standards already in place when providing on-going advice services, which were covered in COBS. COBS 6.1A.22 says:

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“A firm must not use an adviser charge which is structured to be payable by the retail client over a period of time unless (1) or (2) applies: (1) the adviser 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 retail 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 retail client to give any reason; or (2) the adviser charge relates to a retail investment product or a pension transfer, pension conversion or pension opt-out or arrangement with an operator of an electronic system in relation to lending for which an instruction from the retail client for regular payments is in place and the firm has disclosed that no ongoing personal recommendations or service will be provided.” I’ve seen a copy of the document Mrs H and T signed in May 2016 to transfer servicing rights to BB. This explained to Firm N that they wanted to transfer “full servicing rights together with any ongoing adviser renumeration and adviser charging” to BB. Also, I’ve been provided a copy of the agreement between Mrs H and BB, signed by both of them in November 2016. I know in her 2024 contact with BB, Mrs H said she’d not signed this, but this is no longer in dispute because Mrs H has accepted our Investigator’s view in which he explained why he thought that signature was hers. The agreement was titled “Service and Payment Agreement – Advised Services”. This included a section about the services which BB agreed to provide. It said Mrs H had asked it to provide “ongoing services as part of our advised service offering”. And it said Mrs H had elected to receive ongoing service which would include BB contacting her “at least every 12 months to offer you a meeting to review your current circumstances, needs and objectives. During this review we will also provide you with a summary (either verbally or in writing) of the performance and status of the policies and investments on which we provided you with initial advice. If you specifically ask us to do so, we may review the ongoing suitability of other policies or investments which were not part of our initial advice and an additional payment may be agreed for this. If we recommend any changes we will implement them with your agreement.” In my view, this set out the service Mrs H should expect to receive quite clearly. The service was described several times as being ‘advised’. And the ongoing service primarily involved BB contacting Mrs H to provide a review at least every twelve months – which is consistent with the relevant rules I’ve referenced. Mrs H says she didn’t receive any advice or annual reviews from BB. And I haven’t seen or been provided any evidence of annual reviews having been conducted by BB with Mrs H; BB hasn’t evidenced – through information such as emails, diary entries or telephone notes – that any of its advisers held meetings (either in person or virtually) with Mrs H to carry out annual reviews. And nor have I seen evidence that these were offered but declined by Mrs H. In addition, BB hasn’t evidenced any fact-finds being completed with Mrs H in order for it to understand her circumstances (and any changes to those) each year, nor any assessment or re-assessment of her attitude to risk. Further, I’ve not seen any evidence that demonstrates any analysis of the pension and whether this remained suitable for Mrs H, based on her specific circumstances. And I haven’t seen any evidence of the results of a

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review having been communicated to Mrs H. So, it appears BB has not carried out annual reviews with Mrs H. BB has provided us with information and commentary about its previous relationship, and ongoing dispute, with Adviser Y. It has said that this has affected its ability to provide information to support its position in respect of the complaint – as Adviser Y retained relevant information after their agreement ended. And it has said Adviser Y was involved in the provision of ongoing services. I’ve seen template information BB sent to customers which were introduced to it by Adviser Y. This said that Adviser Y would be working with BB to “maintain continuity”. But Adviser Y was unregulated. And Mrs H’s instruction to Firm N said that servicing rights were to be transferred solely to BB, with no mention of Adviser Y. And the agreement about ongoing services was also between BB and Mrs H – Adviser Y was not a party to the contract. So, while I’ve taken on board what BB has told us about its relationship and dispute with Adviser Y, any commercial decision BB made to engage with or outsource services to an unregulated third party, and any contract it entered into with that third party to that effect, doesn’t change the fact that BB, as the regulated entity, was the party which had the contract with Mrs H. BB was responsible for providing the contracted services to Mrs H, for which it was receiving fees. These were described as ‘advised services’ and primarily involved annual reviews. Advice and those reviews – which were to look at Mrs H’s “current circumstances, needs and objectives” – required an assessment of the ongoing suitability of the products Mrs H held. Any such assessment and personal recommendation (advice) required an adviser to be regulated and hold the relevant FCA permissions. And again, Adviser Y didn’t hold these permissions. So, any annual reviews provided under BB’s ‘advised service’ needed to be conducted and carried out by BB. As the regulated advising business, BB needed to have robust systems in place to ensure reviews happened and were documented. It isn’t clear why records of any reviews (which for the reasons I’ve explained should have been carried out by BB, the regulated party) were apparently, as BB suggests, held with Adviser Y, the unregulated introducer. But whatever the reason for the decision that was taken about data retention though, we are an evidenced based service. And BB hasn’t been able to provide evidence that it carried out annual reviews with Mrs H – something it should be able to demonstrate. Taking all of this into account, based on what I’ve seen I can’t reasonably say that BB has provided Mrs H the core element of the ongoing service that the agreement between the parties outlined. And so, a refund of the amounts she paid for this service, would in my view be fair. BB says Mrs H has benefitted from its ‘quarterly rebalancing service’. But as I say, we are an evidence based service. And BB hasn’t provided evidence of any activity it has carried out as part of the ongoing services Mrs H was paying for since August 2018 – annual reviews or other services such as rebalancing or other regulated advice. Further, Mrs H asked in 2018 for the Firm N investment to be switched to cash so I don’t see what rebalancing would have been carried out for it after that switch was made. But in any case, the agreement around ongoing services between Mrs H and BB didn’t refer to ‘rebalancing’ as forming part of the service to be provided. And I’ve seen no evidence of the agreement between the parties having been altered to replace the agreed annual reviews with this quarterly exercise. Further, I also don’t think any quarterly rebalancing suggestions can fairly be said to represent advice based on Mrs H’s personal circumstances.

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I’ve been provided no evidence of BB undertaking fact-finds or other information gathering to understand Mrs H’s circumstances before these summaries were issued. From information BB has provided in response to other similar complaints, I also understand that the suggested changes to portfolios had been analysed and suggested by a ‘highly regarded’ third party business. And even where changes to investments were suggested, these appear to have been stock changes to investments and portfolios for all customers, based on economic conditions and their impact on markets in general rather than being specific to individual customers, like Mrs H. So, while BB may question the fairness of a refund of fees given its argument that Mrs H has received a quarterly rebalancing service, I can’t see that this was something that was in fact provided to her, or that it was something Mrs H asked for or agreed to, either alongside or in place of the ongoing annual reviews and advice. So, I don’t think it would be fair to retrospectively attempt to apply and attribute a cost, from the fees charged, to this service, as one was not agreed or provided. Putting things right For the reasons I’ve explained, I think BB has failed to provide the core part of the agreed ongoing service – annual reviews and advice - in respect of the pension Mrs H was a trustee and beneficiary of. My aim in awarding fair compensation is to put Mrs H back into the position she would likely have been in had it not been for BB’s failings. Had the fees not been taken from the Firm N account from August 2018 to June 2024, the pension would have been higher by the value of those fees and any investment returns those fees would have benefitted from. In light of the above, BB must: • Calculate the loss in value of the pension due to the deduction of the advice fees taken over the period stated above. This will mean calculating the lost investment returns on each advice fee from the date the fees were deducted to the date of transfer. The total loss at the date of transfer should then be increased by a rate of return based on the benchmark Index to date of settlement. • BB should pay into the pension plan, to increase its value by the amount of the compensation and any interest. The payment should allow for the effect of charges and any available tax relief. Compensation should not be paid into the pension plan if it would conflict with any existing protection or allowance. • If BB is unable to pay the compensation into the pension plan, it should pay that amount direct to Mrs H. But had it been possible to pay into the plan, it would have provided a taxable income. Therefore the compensation should be reduced to notionally allow for any income tax that would otherwise have been paid. This is an adjustment to ensure the compensation is a fair amount – it isn’t a payment of tax to HMRC, so Mrs H won’t be able to reclaim any of the reduction after compensation is paid. • The notional allowance should be calculated using Mrs H’s actual or expected marginal rate of tax at her selected retirement age. • It’s reasonable to assume that Mrs H is likely to be a basic rate taxpayer at the selected retirement age, and neither party has disputed this, so the reduction would equal 20%. However, if Mrs H would have been able to take a tax free lump sum, the

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reduction should be applied to 75% of the compensation, resulting in an overall reduction of 15%. • BB should provide the details of the calculation to Mrs H and T in a clear, simple format. Portfolio name Status Benchmark From (“start date”) To (“end date”) Additional interest Pension No longer in force Average rate from fixed rate bonds 16 August 2018 Transfer of service SSAS bank account interest rate to date of settlement Why is this remedy suitable? I’ve chosen this method of compensation because: • Mrs H wanted to achieve a reasonable return without risking any of her capital. • The average rate for the fixed rate bonds would be a fair measure given Mrs H’s circumstances and objectives. It doesn’t mean that Mrs H would have invested only in a fixed rate bond. It’s the sort of investment return a consumer could have obtained with little risk to the capital. My final decision For the reasons I’ve explained, I uphold Mrs H and T’s complaint. To resolve matters, Bruce Bennett, trading as Beneficial Financial Management, should put things right as I’ve set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask T and Mrs H to accept or reject my decision before 3 April 2026. Ailsa Wiltshire Ombudsman

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