Bruce Bennett, trading as bfm · DRN-6044344

The complaint Mrs E complains that Bruce Bennett, trading as bfm, (‘BB’) has not provided ongoing services and regular reviews despite receiving regular fees to do so. What happened Mrs E has an ISA with a provider that I’ll call ‘Firm N’. This was opened in 2013. A different regulated business recommended Mrs E open the ISA with Firm N and the application from the time shows a financial adviser working for that other business, who I’ll call ‘Adviser Y’, was the one who advised her. The application for the ISA, which Mrs E signed, also confirmed that an ongoing adviser fee of 1% per annum would be payable from the account. Mrs E says the ongoing service she received from the regulated business that previously acted as her adviser, and in particular Adviser Y, involved holding annual review meetings with her to discuss her investments, which were followed up in writing after each meeting. This was in addition to quarterly summaries also being provided. I understand Adviser Y left the regulated business they were previously working for in 2016. BB has stated, and provided evidence to support, that it entered into an agreement with Adviser Y in 2016 to act as an introducer to BB. Adviser Y did not become an employee of BB. Adviser Y was acting in an unregulated capacity by the point they began introducing customers to BB. And, from the information I’ve seen, that did not change and they did not go on to become regulated again by the Financial Conduct Authority (‘FCA’) following their commencement of their introducer role. They also do not appear on the FCA register entry for BB as either an agent, appointed representative (‘AR’) or an introducer appointer representative (‘IAR’). So, when acting as an introducer, they were doing so unregulated. Adviser Y introduced Mrs E to BB. On 14 April 2016, Mrs E signed a letter of authority addressed to Firm N, asking it to transfer “full servicing rights together with any ongoing adviser renumeration and adviser charging” to BB. BB has provided a template copy of an acknowledgement letter it says was sent to customers that were introduced to it by Adviser Y. This explained that BB was aware customers “have been used to an excellent level of service from [Adviser Y] and we will do our utmost to maintain these standards”. It went on to explain “Although [Adviser Y] is not authorised at this time to provide Independent Financial Advice we are delighted to confirm that [they] will be working with us to maintain continuity and ensure we meet your expectations.” I’ve been provided a copy of an agreement titled “Service and Payment Agreement – Advised Services” between BB and Mrs E. This was signed by Mrs E on 16 January 2017. This included a section about the agreed services. This said, in respect of the ongoing advice services Mrs E had elected to receive, BB would “contact you 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

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the performance 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.” It went on to confirm that BB would take a fee of 1% per annum for these services. BB wrote to Mrs E on 10 August 2017. The letter was a promotion of options available via a different ISA provider. In September 2017, a lump sum contribution was made into the ISA by cheque and balances were transferred in from other ISA’s that Mrs E held. The Firm N application confirmed BB as Mrs E’s registered adviser at the time. BB wrote to Mrs E again on 20 November 2017 enclosing a quarterly report and valuation for her model portfolio. The letter said BB could confirm no changes had been made in that quarter. I’ve been provided copies of several emails sent to Mrs E, enclosing further quarterly statements. An email sent on 21 September 2021, which copied in Adviser Y, didn’t reference any changes to her portfolio. The next email I’ve been provided, sent on 30 June 2022 and again copying in Adviser Y, said that recommended changes to the model portfolio were enclosed and asked Mrs E to confirm she was happy to proceed. Another email on 15 December 2022 said it was providing an “update on the 2022 quarter 3” model portfolio release. This explained that there were changes recommended across the majority of portfolios, largely to do with reallocating between different funds. The email confirmed that the changes to portfolios would be made by the end of December 2022 unless BB heard to the contrary. In March 2023, BB sent another quarterly update to Mrs E. The covering email again said adjustments were to be made and asked her to confirm she wished to proceed. And I’ve seen a copy of an emailed reply from Mrs E on 18 March 2023 giving permission for the proposed changes. BB sent a similar email in September 2023, asking Mrs E to confirm her instructions. Mrs E replied to that email on 14 September 2023 confirming she was in contact with Adviser Y. BB emailed Mrs E again in March 2024, providing a quarterly valuation and asking her to confirm she gave permission for the portfolio rebalance. On 21 March 2024, Mrs E signed a letter instructing Firm N to remove BB as her financial adviser. On 27 June 2024, Mrs E requested information from BB around the fees it had received as well as copies of her agreement with it. She then subsequently complained that it hadn’t provided the agreed services noting she’d not had any meetings or discussions with any of BB’s advisers since it began receiving fees. In response to the complaint, BB made Mrs E aware of an ongoing dispute between it and Adviser Y and noted that it had limited access to documents. It asked her to sign a letter of authority in order for it to request information from Firm N, to help BB to respond to the complaint. And BB’s solicitor, dealing with its dispute with Adviser Y, wrote to Mrs E to also request this.

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Mrs E asked the Financial Ombudsman Service to consider her complaint. She said BB was the party that was required to provide services and she was unhappy that its dispute with Adviser Y had been brought into the matter. BB provided us with detailed information about its dispute with Adviser Y. It said it believed that Mrs E’s complaint, as well as several similar ones from other consumers, stemmed from the dissolution of the agreement between BB and Adviser Y. And BB felt it was unfairly bearing responsibility for Adviser Y, an unregulated party, acting incorrectly. It also said it thought Mrs E’s complaint had potentially been raised too late for our Service to consider. One of our Investigator’s looked into the complaint. They concluded that we could consider part of Mrs E’s complaint – about the fees charged in the six years prior to the complaint being made. And they thought her complaint should be upheld as there was no evidence to indicate that BB had conducted annual reviews and provided the agreed services to Mrs E. Neither party has disputed the Investigator’s findings in respect of our jurisdiction. In terms of the fees we could consider, BB disagreed with our Investigator’s opinion and asked for an Ombudsman to consider the complaint and whether a refund was fair. It argued that Mrs E had been receiving its ‘bespoke rebalancing service’ with quarterly reports and rebalancing suggestions being provided. And there had been regular email contact between the parties. So, it didn’t agree that Mrs E had not received an ongoing service and argued it would therefore be unreasonable for the fees to be refunded. As agreement could not 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. On the subject of which parts of this complaint we could consider, as I’ve mentioned, neither party provided any further arguments on this point in response to the Investigator’s opinion. Their opinion being we could only look at whether BB failed to provide the agreed services from 27 June 2018, six years prior to the complaint being made, onwards. As neither party has provided any further comments or objections, I don’t intend to discuss the matter of jurisdiction further other than to say I agree with the conclusions reached by the Investigator, based on the available information. And so, I’m only looking at fees charged and whether the agreed service was provided from 27 June 2018 onwards. 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 FCA’s 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:

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“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 which businesses were already expected to follow. Rather it re-enforced or reminded firms of the standards already in place when providing on-going advice services. There are also specific rules and guidance within COBS about ongoing advice charges. COBS 6.1A.22 says: “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.” And in January 2018, the COBS rules were updated and defined the minimum service that should be offered in relation to ongoing advice, by requiring an annual review of suitability for relevant products (COBS 9A.3.9 – arising from MIFID II). As I’ve mentioned, Mrs E signed a ‘Service and Payment Agreement – Advised Services’ on 16 January 2017. This had a section headed ‘The Services’ and said BB agreed to provide ‘ongoing advice services’. In the summary of what these entailed BB said “you have asked us to provide ongoing services as part of our advised service offering.” It went on to talk about the service level that Mrs E had selected. Again, this said that BB would “contact you 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 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 what could be expected quite clearly. The ongoing service primarily involved BB contacting Mrs E to provide a review at least every twelve months – which is consistent with what the relevant rules I’ve referenced required.

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And this is in line with the service that Mrs E has said she expected to receive. Mrs E said the business that was advising her previously, for whom Adviser Y had worked, had contacted her annually to review her circumstances and financial products and followed this up in writing, in addition to providing quarterly statements. And Mrs E says she was led to believe that she would receive the same level of service from BB. But Mrs E says she didn’t receive any annual reviews from BB (or invitations to such reviews). And she says she didn’t speak to any of its advisers over the time that it was receiving servicing fees. So, she says BB has failed to provide the agreed service. BB has provided us with a great deal of information and commentary about its 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 and Firm N is now also unable to share this due to BB being removed as Mrs E’s agent. BB has also said that Adviser Y was being paid a percentage of the ongoing advice fees BB was receiving after the introduction. And it has indicated 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”. And BB says that the information indicates that Mrs E was in ongoing contact with Adviser Y after the introduction – not least quarterly reports being copied to Adviser Y and Mrs E confirming in an email in September 2023 that she was in contact with them. BB has also said that, because she was in contact with Adviser Y, Mrs E didn’t fully engage with it. I’ve taken account of what BB has said. And I agree the information, in particular several of the emails, indicates that there was some ongoing communication between Mrs E and Adviser Y. But I’d note the template information sent to customers that had been introduced to BB also acknowledges that Adviser Y was unregulated. The instruction Mrs E gave Firm N in 2016 was to transfer servicing rights to BB alone. And the agreement about ongoing services was between BB and Mrs E – Adviser Y was not a party to the contract. So, while I appreciate that BB considers the issues it has with Adviser Y to be important, the complaint I’m considering ultimately concerns the agreement between Mrs E and BB. 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 E. And BB was responsible for providing the contracted services to Mrs E, for which it was being paid. These were described as advised services and primarily involved annual reviews. Advice and those reviews – which again were to look at Mrs E’s “current circumstances, needs and objectives” – required an assessment of the ongoing suitability of the products Mrs E held. Any such assessment and personal recommendation (advice) required an adviser to be regulated and hold the relevant FCA permissions. And Adviser Y didn’t hold these permissions. So, any annual reviews provided under BB’s ‘advised service’ needed to be conducted and caried out by BB. I haven’t seen or been provided any evidence of annual reviews having been conducted by BB with Mrs E. BB hasn’t evidenced – through information such as emails, diary entries or telephone notes – that any of its advisers contacted Mrs E to carry out annual reviews, or that these were offered but declined. BB hasn’t evidenced any fact-finds being completed with Mrs E 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. None of the quarterly statements and covering emails that I’ve been shown demonstrated any analysis of Mrs E’s ISA and investments held and whether they remained suitable for her. And I haven’t seen any evidence of the results of a review having been communicated to Mrs E. So, it appears BB has not carried out annual reviews with Mrs E.

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BB has said that because Mrs E remained in contact with Adviser Y, she didn’t engage with it. But again, there is no evidence of it offering to conduct an annual review and this being turned down. And if as BB claims, it felt Mrs E was not engaging, it had the option much sooner of reviewing and discussing with Mrs E whether paying for, but not taking, ongoing advice remained suitable for her – it didn’t have to just continue to collect fees. Indeed, an FCA review of ongoing financial advice services, published in February 2025, said that this was something it would expect businesses to consider. BB has talked about the problems it has had accessing evidence – saying Adviser Y and Firm N are unwilling to share information. But as the regulated advising business, BB needed to have robust systems in place to ensure reviews happened and were documented – not least because when the subsequent review took place this information would be required for comparison. I also can’t see how Firm N, the product provider, would hold information about annual reviews, as it was not the adviser. And 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 held with Adviser Y, the unregulated introducer. 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 E – something it should be able to demonstrate but has not been able to. Taking all of this into account, based on what I’ve seen I can’t reasonably say that BB has provided Mrs E the ongoing service that it agreed to when she became its customer. I can’t see that it conducted annual reviews and provided ongoing advice about the suitability of Mrs E’s products. And indeed, even where the ISA was topped up with a cash deposit and transfers from other providers, I’ve seen no evidence of BB looking at the suitability of the product or reviewing Mrs E’s circumstances. BB has said that it carried out, and Mrs E had benefitted from, its ‘quarterly rebalancing exercise’. And as I’ve said I’ve seen examples of quarterly statements being issued to Mrs E and, where changes to the investment portfolio were recommended, it asking Mrs E to consent to these. But the signed agreement around ongoing services between Mrs E and BB didn’t refer to these summaries and this ‘rebalancing exercise’ 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. I also don’t think the quarterly rebalancing suggestions can fairly be said to represent advice (ongoing or otherwise) based on Mrs E’s personal circumstances. I’ve been provided no evidence of her circumstances or objectives being reviewed. In addition, I understand from submissions BB has made in other complaints, that it was a ‘highly regarded’ third party business that determined whether portfolios should be rebalanced. And even where changes to investments were suggested, these appear to have been based on socio-economic conditions and their impact on markets in general – suggesting the changes were stock changes to investments and portfolios already in operation, not specific to Mrs E and her needs, objectives or re-assessed attitude to risk. BB has questioned the fairness of a refund of fees being recommended, when Mrs E has received this quarterly rebalancing service. But again, I can’t see that this was something that Mrs E 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 a cost to this service, as one was not agreed. Mrs E has also said that the way that BB has handled her complaint has caused her distress and inconvenience – in particular it referring to its dispute with Adviser Y and asking her, directly and through its solicitors, for authority to gather information from Firm N. But I don’t think BB acted unfairly in dealing with her complaint. It did ask for her to sign a letter of

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authority. But I don’t think it was unreasonable for it to do so – as it believed obtaining that information was necessary to fully answer her complaint. I also don’t think it was unreasonable for this request to be repeated by BB’s solicitors, dealing with the dispute with Adviser Y. And I can’t see that BB or its solicitors suggested at any stage that Mrs E’s complaint was the subject of or involved legal action. And just because I’ve now found that I think the complaint should be upheld, doesn’t mean BB acted unreasonably by not agreeing with her complaint from the outset. So, I don’t make any further award for this. Putting things right For the reasons I’ve explained, I think BB has failed to provide the agreed ongoing review service in respect of Mrs E’s ISA with Firm N. And so, I believe it is fair and reasonable that all fees that were charged to her ISA in respect of reviews due from 27 June 2018 onwards, which weren’t provided, be refunded. These amounts should be adjusted for growth had the fees remained in the ISA, invested proportionately in the same investments, from the date the fees were deducted to the date of my final decision. The compensation amount should be paid into Mrs E’s ISA if possible - provided this doesn’t result in her exceeding her annual ISA allowance. If a payment into the investments isn’t possible, compensation should instead be paid directly to Mrs E as a lump sum. BB should provide details of the calculations of the redress to Mrs E in a clear, simple format. My final decision For the reasons I’ve explained, I uphold Mrs E’s complaint. To resolve matters, Bruce Bennett, trading as bfm, should compensate Mrs E in line with the putting things right section of this decision. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs E to accept or reject my decision before 20 February 2026. Ben Stoker Ombudsman

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