Chase De Vere Independent Financial Advisers limited · DRN-6228304

The complaint Mrs C complains that Chase De Vere Independent Financial Advisers limited (Chase de Vere) failed to provide her with the required level of ongoing service it ought to have done on her investment bond. What happened In 2008 Mrs C opened an onshore investment bond with Canada Life and invested around £164,000 on the advice of a separate firm – Firm M In 2017 Chase De Vere acquired Firm M. Mrs C’s adviser from Firm M moved to being authorised under Chase De Vere. Firm M remained responsible for the sale of Mrs C’s bond, but Chase de Vere became responsible for any future service. In December 2017 Mrs C entered into an agreement with Chase De Vere to provide ongoing services in return for a commission payment of 0.5% of her bond’s value each year. Chase De Vere says the agreed level of service was described in a letter sent to Mrs C on 5 December 2017. Amongst other things, it said; Ongoing investment services In view of your situation and the nature of the financial planning services to be provided, we agreed the most appropriate level of ongoing investment service for you is that offered by our Primary service level. Key features of the Primary service The Primary service level is best suited to clients who do not require regular, ongoing investment management but value ongoing monitoring of their investment(s) and a dedicated point of contact. I will continue to act as your point of contact beyond the implementation phase of your personal financial plan. If you would prefer to work with me on a more structured and proactive basis, we can discuss the possibility of increasing your level of ongoing investment service at any time, to either our Enhanced or Premier service level, however both of these levels of service do incur further ongoing charges which would need to be factored into any decision. Also included in the Primary service level: • A portfolio report, sent once per year, will provide you with an in-depth analysis of your entire portfolio of investments, including collective investment schemes, investment bonds, pensions and more esoteric holdings, such as venture capital trusts and enterprise investment schemes. The report includes investments held both within and outside an investment platform. In addition

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to valuing your portfolio, your report will give you an insight into how your capital is distributed. This includes a view of your exposure to different asset types, as well as the different tax wrappers utilised and of the fund(s) and provider(s) with which you are invested. • In addition to your portfolio report, for any investments placed on an Investment Platform you will receive an annual valuation of your holdings – typically issued between June and July. You will also benefit from online access to your Platform investments. Your login details will be sent to you directly by the Platform service provider. • Our fund alerts service will give you the peace of mind that, should our investment analysts downgrade your investment(s) to a Sell status, the change in stance will be brought to your attention. • We also offer an interim alerts service, which helps keep our clients informed of the latest developments in the economy, legislation and the financial markets. • Regular issues of our e-mail newsletter will help keep you informed of events in the wider world of personal finance. • Budget updates is an e-mail based commentary published following the Chancellor’s Budget announcements – ensuring you are aware of any proposals likely to have an impact on your financial planning. In 2022 Mrs C met with Chase de Vere. It recommended switching her funds within the bond to a single fund. It sent Mrs C a suitability letter outlining its recommendation. Chase de Vere charged Mrs C £250 for this recommendation. In November 2024 Mrs C complained to Chase de Vere. She complained about both the sale of the investment bond from Firm M – which is being dealt with in a separate complaint against Firm M – and the ongoing service she received from Chase de Vere since becoming its client in 2017. In her complaint Mrs C explained how she thought the bond hadn’t been a suitable investment for her, saying that an ISA might have been a better recommendation. In the part of her complaint addressed to Chase de Vere, Mrs C said that it had taken over the ongoing advice and suitability of her investment since 2017. She thought as part of her agreement with Chase de Vere, it ought to have considered moving her funds into an ISA. But the use of an ISA had never been recommended. Mrs C said she’d raised concerns about the bond’s value in 2022 and was given advice to switch funds but was charged £250 for that advice. She says Chase de Vere recommended that she continue to invest in the bond but thought it should have recommended an ISA at that point instead. Mrs C says she’d originally been invested in 10 funds reducing to one fund in 2022. But she’s now ended up invested in three funds. And one of those has been closed by Canada Life and could lead to the total loss of her capital in that fund. She says Chase de Vere failed to review her income needs over the years resulting in her having to make capital withdrawals from the bond. Mrs C went on to say she didn’t know whether the advice to switch into just one fund in 2022 was suitable and thought she could have been persuaded to stay where she was. Since the changes were made, the property fund she was invested in has been closed and she may lose around £11,000. Finally, Mrs C said Chase de Vere’s annual portfolio reports recorded the costs and charges

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of her investments to be 0% which she said was extremely misleading as it didn’t display the correct charges on her bond. Chase de Vere responded to Mrs C’s complaint. It said prior to the advice it gave in 2022 it had sent several ‘fund alerts’ to Mrs C. The purpose of which was to prompt a review. In the review Chase de Vere’s adviser didn’t think it was feasible to rebalance the portfolio’s multiple funds and thought a single, self-managed fund was appropriate. It thought Mrs C’s investment bond had been suitable as its value had risen over the years and Mrs C had made use of tax-free withdrawals. Chase de Vere acknowledged that the ‘cost and charges’ section of Mrs C’s portfolio report was not completed. It offered Mrs C £50 for the distress and inconvenience caused by this. Mrs C didn’t accept Chase de Vere’s response to her complaint and brought it to our service. Our investigator gave their opinion on Mrs C’s complaint which wasn’t accepted by either side. So, as no agreement could be reached, the complaint was passed to me for a decision. I sent Chase de Vere and Mrs C a provisional decision on the complaint. In it I said I was minded to partially uphold Mrs C’s complaint, and I set out how Chase de Vere should put things right. I’ve included the relevant findings from my provisional decision below. My provisional decision In my provisional decision I said: I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. When considering what is fair and reasonable, I take into account relevant laws and regulations as well as the regulator’s rules, guidance and standards. Where appropriate I also consider what was good industry practice at the time of the advice. Mrs C’s bond was sold to her in 2008 which was prior to the regulator’s Retail Distribution Review (RDR) in late 2012. Prior to the RDR, providers often paid commission to advisers by deducting an agreed sum from its customers’ investments each year. These payments may have been intended to cover an ongoing service, but it was often paid to advisers without them reviewing the investments or providing additional advice. Any ‘new’ advice given after the RDR required an adviser charging agreement to be reached between a client and firm in order for that firm to be paid for that new advice. Following RDR firms weren’t allowed to be paid for advice through commission. There were a few exceptions to this rule, like for example where a regular contribution was reduced or where funds were switched within an existing life policy, like what happened with Mrs C’s policy in 2022. The rules allowed for firms to continue to accept the commission, sometimes called trail commission, on policies which began prior to the RDR. And firms could transfer the commission to a new firm as part of a commercial agreement to do so if, for example, the firm was acquired by a new firm as it was in this case. From 2017 Chase de Vere was paid the trail commission from Mrs C’s bond each year. The commission was 0.5% of the value of the bond each year. And in December 2017, Chase de Vere made a commitment to Mrs C to provide certain services in exchange for the commission it received. I’ve set out in the background what that commitment was.

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Having made a commitment to Mrs C to provide certain services to her in exchange for the commission received, Chase de Vere had to ensure that it actually delivered those services to her. I appreciate Mrs C’s strength of feeling that Chase de Vere ought to have advised her to do something different with her funds invested in the bond, like recommend an ISA or different arrangement. But providing advice or personal recommendations wasn’t something that Chase de Vere had committed to do in return for the commission it received. Moreover, as Chase de Vere were involved post the RDR, it was prohibited from providing advice on new products in exchange for the commission it received. Any advice Chase de Vere provided had to be paid for through adviser charging and a new agreement would need to be reached. In the letter Chase de Vere sent Mrs C, it explained that if Mrs C wanted to increase the level of service she received from Chase de Vere, she could do so but would incur additional costs. I’ve seen no evidence that Mrs C paid for the type of service, including the proactive provision of personal recommendations that she now feels she was entitled to. So, I can’t agree that Chase de Vere ought to have proactively provided that level of service which would have come at an additional cost to Mrs C but wasn’t agreed. In 2022 Chase de Vere gave Mrs C a personal recommendation. That recommendation was to make a fund switch within the bond. Mrs C feels Chase de Vere ought to have considered putting the funds into an ISA instead. In its suitability letter Chase de Vere said; I recommend that you continue to invest in an Investment Bond because it is regarded as non-income generating for tax purposes. There is no tax to pay whilst the assets remain invested, as no income is deemed to have been generated. This greatly reduces the administration and professional fees that would otherwise be required. I’m therefore satisfied, as part of the advice process Chase de Vere had considered the continued suitability of the investment in the bond. At that time Mrs C had been invested in the bond for 14 years and had built up the ability to make large income withdrawals, if she needed to, through the rolling up function of an onshore bond. I see no reason why Chase de Vere would have recommended a surrender of the bond at that point potentially leading to a large chargeable event if Mrs C didn’t have a need for a sum of money larger than the allowable tax-free income payment she could have received. Chase de Vere recommended Mrs C move out of the 10 funds she was invested in, into one single self-managed fund. It explained its reason for doing so was because as a primary client, Mrs C’s portfolio didn’t rebalance internally when required. But putting the funds into a single mixed-asset managed fund would mean it was internally rebalanced without the need for further advice. Chase de Vere explained it had reassessed Mrs C’s attitude to investment risk and recommended a mixed-asset managed fund to match. The recommended fund was also cheaper than her previous funds. In my opinion, Chase de Vere’s recommendation in 2022 was suitable. Its recommendation

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matched Mrs C’s objectives and was in line with her attitude to risk. Mrs C says she’s now ended up in three funds, one of which was suspended. I can see that a property fund that Mrs C was invested in for many years was suspended by Canada Life. Its website explains that was due to a surge in investor withdrawals. But as this was a property fund, the underlying assets (property) needed to be sold and distributions paid. Canada Life have said that process may take two to three years. I’ve seen that Mrs C has received some distributions which have been paid into a money fund, causing Mrs C to have a third fund alongside her mixed-asset and suspended property fund. But that was a commercial decision made by Canada Life and not Chase de Vere. It wasn’t Chase de Vere who recommended the property fund to Mrs C. But even if it did, I don’t think it would have been unsuitable for Mrs C to hold a percentage of a mixed-asset portfolio in a property fund. And Chase de Vere couldn’t have foreseen Canada Life’s decision to suspend the fund. So, I don’t think Chase de Vere are responsible for the position Mrs C is now in with the suspended fund. Whilst Chase de Vere hadn’t agreed to provide any ongoing advice to Mrs C in return for the commission it received, it committed to providing specific services. As I’ve said, I’d expect Chase de Vere to deliver the service it had committed to. So, I’ve gone on to consider whether it did. In its commitment to Mrs C, Chase de Vere said it would provide six bullet pointed services including a portfolio report; annual valuation; fund alerts; interim alerts; e-mail newsletter; and budget updates. Our investigator concluded that Chase de Vere hadn’t provided the ongoing service it had committed to in 2018 and 2019. And I agree. I say that because I’ve seen no evidence that Chase de Vere provided Mrs C with the vast majority of the services it committed to in those years. When responding to our investigators view of the complaint, Chase de Vere said its adviser had contacted Mrs C in January 2019 regarding taking income from her bond and offered to meet with her later in the year. The adviser sent a further letter in May 2019, noting it had been a while since he’d reviewed her circumstances and financial plans, and offered to meet with Mrs C to discuss. Chase de Vere went on to say that its adviser couldn’t provide Mrs C with a service if she didn’t reply to his emails and letters. I disagree. I say that because the services Chase de Vere had committed to in its letter of December 2017, didn’t require active engagement from Mrs C. In later years, Chase de Vere sent Mrs C portfolio reports and fund alerts as agreed, but these did not require Mrs C to have met with Chase de Vere before they were produced. But Chase de Vere have sent no evidence that it produced and sent Mrs C a portfolio report in 2018 or 2019. Or any of the other services it committed to providing. Chase de Vere say that Mrs C wasn’t entitled to annual reviews. Despite that, its adviser had written to Mrs C suggesting they meet. But whether the adviser had offered an additional

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service Mrs C wasn’t entitled to in 2019, doesn’t affect my decision that the services it had committed to providing Mrs C, weren’t provided in 2018 or 2019. Chase de Vere also provided copies of the valuations Canada Life sent in 2018 and 2019. But that isn’t something which Chase de Vere did for Mrs C in those years. The annual statements were produced by a separate firm, Canada Life who were required to do so and simply forwarded on a copy to Chase de Vere. It wasn’t a document Chase de Vere produced. I accept that there might have been years where things like the ‘fund alerts’ might not have been required. If Chase de Vere didn’t have concerns with the performance of the funds Mrs C was invested in, then it wouldn’t have cause to send an alert. But the portfolio report was a report based on the performance of Mrs C’s bond. And I can’t see any reason that couldn’t have been produced every year as Chase de Vere had committed to. I’ll explain below what Chase de Vere must do to put things right for the years 2018 and 2019. In December 2020 Chase de Vere sent Mrs C the portfolio report with a covering letter explaining details of the bond and market commentary. In July 2021 Chase de Vere sent Mrs C her portfolio report and in October 2021 it sent a fund alert letter indicating that it had identified a fund Mrs C may have wanted to review to sell in July 2021, but she hadn’t replied. In January 2022 Chase de Vere sent a further fund alert reminder following receiving no response to its October 2021 letter. It sent a portfolio report and further fund alert letter in October 2022. While no portfolio report was sent in late 2023 when it was due, a portfolio report was sent to Mrs C in January 2024. I’m satisfied, although late, this was broadly in line with its commitment to Mrs C. Mrs C would have been due another portfolio report in late 2024, however she decided to transfer the servicing of her bond to a new adviser in August 2024. I’m mindful that Chase de Vere haven’t sent any copies of newsletters or budget updates which it also committed to providing. But when considering the value of the services it provided, I think the bulk of the value to Mrs C came in the portfolio reports and fund alerts which were personalised to her investments rather than the newsletters and budget updates which weren’t tailored to her individual circumstances. Having considered all the available evidence, I’m satisfied its reasonable for Chase de Vere to have accepted the commission from Mrs C’s bond between 2020 and 2024 when it delivered a service in return for that commission. Mrs C also complained about the incorrect information regarding charges included in the portfolio reports. Chase de Vere have already acknowledged it made an error in not completing the charges section of its reports. It offered £50 for the distress and inconvenience that caused. I’d usually recommend an award of £50 in circumstances where there had been a one-off small administrative error causing minimal impact. Whilst I acknowledged that Mrs C was most likely told of the charges when her bond was sold in 2008 and Chase de Vere did include some information about charges in its 2022 suitability letter, the error was repeated in each of the portfolio reports it produced. Mrs C says this was very misleading when she

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considered the value for money her bond offered. I’m minded to say Chase de Vere should pay Mrs C £250 for this repeated error as that better reflects the distress and inconvenience caused by repeating the error over several years and giving Mrs C an incorrect view of the value of her bond. The responses to my provisional decision Chase de Vere provided comments on my provisional decision. In summary it said it disagrees that it should refund the full fees from 2018 and 2019. It recognised that Mrs C didn’t receive valuation statements during that period, but it said she had the choice to engage with as much or as little of the service she chose to. It says Mrs C still had the benefits of a dedicated point of contact and online access to its portal. And its adviser reached out to Mrs C in 2019. Chase de Vere also asked for an explanation of the proposed redress as it said it’s not standard practice for our Service to request both growth on the investment and interest to be added to the compensation. Mrs C also provided a further submission for me to consider. In summary she said: • Despite reviewing her circumstances over the years, Chase de Vere never questioned or discussed the suitability of the investment bond which should have been included in the monitoring and reporting of her investments. • During ongoing reviews Chase de Vere didn’t advise her to use her ISA allowance or give her the choice to remain in the bond or gradually move into more tax efficient arrangements. • Chase de Vere didn’t do any planning with her to avoid a large chargeable event if she encashed her bond. 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 also reconsidered the findings I made in my provisional decision which forms part of this final decision. Having done so, I haven’t changed my mind. I’ll explain why. Mrs C maintains that Chase de Vere ought to have considered the ongoing suitability of her bond and it ought to have considered making a recommendation to move into a different product as part of its monitoring and reporting on her investments. She says it also didn’t give any advice or planning about an encashment of the bond. However as I’ve explained in my provisional decision, Mrs C’s ongoing agreement with Chase de Vere to provide its ‘Primary Service’ didn’t include a provision for Chase de Vere to give advice and recommendations on her investment. And the regulator’s rules said Chase de Vere couldn’t give new advice in return for the commission it received. Chase de Vere had pointed out to Mrs C from the outset that if she wanted a more proactive service from it, she’d incur further ongoing charges. But I’ve seen no evidence Mrs C wanted to or was willing to pay higher charges for ongoing advice. I think the agreement Mrs C had with Chase de Vere was clear and didn’t provide for the enhanced level of service Mrs C says Chase de Vere ought to have provided. I can’t reasonably hold Chase de Vere responsible for not delivering a service it hadn’t agree to.

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In 2022 Mrs C entered into an agreement with Chase de Vere for a specific piece of advice to review her investment bond to ensure it remained suitable and invested in line with her attitude to investment risk. I’ve explained in my provisional decision why I thought that advice was suitable, and I’ve seen no new evidence that cause me to change my mind. Mrs C says Chase de Vere didn’t plan to avoid a large chargeable event if she fully encashed the bond. However, I’ve seen no evidence that she needed to, or was considering, fully encashing the bond when she was given advice in 2022. Mrs C had been making withdrawals from the bond as she was permitted to, and I’ve not seen any discussions where Mrs C warned Chase de Vere of a need for the full encashment value. The objective recorded in the advice from 2020 was that Mrs C wanted to invest for capital growth which would conflict with a notion that Mrs C intended to fully encash her bond. As Chase de Vere thought the investment bond was a suitable product for Mrs C, I don’t think it needed to consider alternatives such as moving funds into an ISA. For these reasons and those explained in my provisional decision, Chase de Vere’s advice in 2022 was suitable. I’ve gone on to consider Chase de Vere’s submission that a full refund isn’t due as Mrs C had a dedicated point of contact and access to her online portal. But I disagree. When setting out its agreement with Mrs C, Chase de Vere didn’t allow for Mrs C to pick and choose which services she wanted for a reduced fee. I can’t say with any certainty that Mrs C would have agreed to allow Chase de Vere to accept commission for a reactive only service like being available on the telephone. A reactive service in isolation, like being available on the phone if needed, is unlikely to come at a cost to Chase de Vere which can be passed on to Mrs C through the acceptance of commission. And the online portal would likely have only contained copies of the annual statements which Canada Life also sent directly to Mrs C, so would have held little value. I don’t think it’s fair, nor is it reasonable, to apply a proportional fee to these two services which Mrs C may not have agree to. The services mentioned didn’t seem to be of much value to Mrs C and came at little cost, if any, to Chase de Vere. As I said in my provisional decision, I think the majority of the value of Mrs C’s agreement with Chase de Vere came from the individualised valuation report which Chase de Vere failed to generate for Mrs C in 2018 and 2019. So, it’s fair that it refunds the commission it received in those years. I’ve considered Chase de Vere’s point that its adviser wrote to Mrs C in 2019. But my decision here is based on whether Chase de Vere delivered the service that it had prior agreement with Mrs C to deliver. The contact from Chase de Vere’s adviser sat outside that agreement and doesn’t evidence that Chase de Vere delivered the service to Mrs C that it had promised to deliver, and she’d paid for through a commission payment from her plan. In setting out fair compensation in my provisional decision I said I was minded to direct Chase de Vere to refund the commission it received, plus investment growth. I also set out the interest that would be due if payment wasn’t made within 28 days. In its response Chase de Vere said it was its understanding that our Service usually wouldn’t award growth on an investment and also apply interest. To be clear, interest is only to be added to the monetary award if payment isn’t made within 28 days. The Dispute Resolution (DISP) rules allow me to provide for interest to be payable on any amount which isn’t paid by a specified date (DISP 3.7.8A). I believe this is fair to both sides as it allows a reasonable time for Chase de Vere to complete its calculation and make

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payment to Mrs C. It also allows for Mrs C to receive fair compensation if Chase de Vere delays in putting things right. Putting things right For the reasons given, it is fair and reasonable for Chase de Vere to refund Mrs C the commission it received in 2018 and 2019. In assessing what would be fair compensation, my aim is to put Mrs C as close as possible to the position she would probably now be in if commission hadn’t been paid in the periods detailed above. Chase de Vere should repay the commission it received from 2018 and 2019, adjusted for growth had the commission remained in the existing investment funds, from the date the fees were paid to the date of my final decision. Mrs C may have to provide Chase de Vere with details of how the funds remained invested after 2024. If it isn’t possible for Chase de Vere to calculate the actual returns in Mrs C’s bond it will need to determine a fair value for Mrs C’s investment instead, using the following benchmarks. For half the investment: FTSE UK Private Investors Income Total Return Index; for the other half: average rate from fixed rate bonds. When using the fixed rate bonds as the benchmark, Chase de Vere should use the monthly average rate for one-year fixed-rate bonds as published by the Bank of England. The rate for each month is that shown as at the end of the previous month. Those rates should be applied to the investment on an annually compounded basis. I’ve chosen this method because the average rate for the fixed rate bonds would be a fair measure for someone who wanted to achieve a reasonable return without risk to their capital. And the FTSE UK Private Investors Income Total Return Index is made up of a range of indices with different asset classes, mainly UK equities and government bonds. I consider that Mrs C's risk profile was in between the two benchmarks used, in the sense that she was prepared to take a small level of risk to attain her investment objectives. So, the 50/50 combination would reasonably put Mrs C into that position. It does not mean that Mrs C would have invested 50% of her money in a fixed rate bond and 50% in some kind of index tracker fund. Rather, I consider this a reasonable compromise that broadly reflects the sort of return Mrs C could have obtained from investments suited to her objective and risk attitude. Chase de Vere must pay Mrs C a total of £250 for distress and inconvenience caused regarding the incorrect fees recorded in the portfolio reports. If Chase de Vere have already paid the £50 it offered, it can deduct that from the total and pay the remainder. The compensation must be paid to Mrs C within 28 days of the date Chase de Vere receives notification of Mrs C’s acceptance of the final decision. Interest must be added to the compensation amount at the rate of 8% per year simple from the date of my decision to the date of settlement if the compensation isn’t paid within 28 days. When calculating the 28 days, Chase de Vere can exclude any time it’s waiting for information from Mrs C or third parties regarding the actual investments held in Mrs C’s bond. Chase de Vere must provide the details of the calculation to Mrs C in a clear, simple format.

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My final decision My final decision is that I partially uphold this complaint. I direct Chase de Vere Independent Financial Advisers limited to put things right as I’ve set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs C to accept or reject my decision before 17 April 2026. Timothy Wilkes Ombudsman

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