St. James's Place Wealth Management Plc · DRN-6253184

The complaint Mrs C complains that St. James's Place Wealth Management Plc (“SJP”) has unfairly deducted an Early Withdrawal Charge (“EWC”) from her pension savings when they were transferred to another provider. What happened I have issued two provisional decisions on this complaint in October 2025 and February 2026. In my second provisional decision I explained why I didn’t think the complaint should be upheld. Both parties have received a copy of the provisional decision but, for completeness, I include some extracts from it below. In my second provisional decision I said; As I said previously Mrs C has also said that an EWC was unfairly deducted when her ISA savings were transferred to another provider. And Mrs C’s husband has also complained about EWCs that were deducted from his pension and ISA savings around the same time. But this complaint, and hence my findings in this decision, only relate to what happened when Mrs C’s pension savings were transferred. In a separate provisional decision, I am dealing with what happened when Mrs C’s husband’s pension savings were transferred. And given the similarities of their complaints I am sure Mrs C and her husband will understand why large parts of my decisions on each case follow the same logic. But should either Mrs C or her husband wish to complain about the EWC applied to their ISA they would need to make an additional complaint, initially to SJP and then referring it to us if matters remain unresolved. Mrs C held pension savings with SJP. Those pension savings had been transferred to SJP from another provider in June 2020. As part of its advice relating to that transfer SJP told Mrs C that her pension savings might be subject to an EWC if they were transferred to a different provider. Mrs C was told that the EWC would be 2.4% in the first year, and that the charge would reduce by 1% per annum. Mrs C asked SJP to transfer her pension savings to another provider in November 2024. At the time of that request SJP says that Mrs C’s pension savings were valued at £79,380.14. But it deducted an EWC of £782.84 meaning that £78,597.30 was transferred to the new provider. Mrs C complained that the deduction of the EWC was unfair. SJP didn’t agree with Mrs C’s complaint. It said that the information it had given to Mrs C at the time she transferred her pension savings had been clear, and that the information had explained that an EWC would be charged if the monies were moved away from SJP in the early years. Unhappy with that response Mrs C brought her complaint to us. In my provisional decision I explained that the EWC Mrs C had been informed about when her pension savings had been transferred to SJP in June 2020 had expired. I had asked SJP for information about the EWC that it had said applied to additional

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monthly contributions to Mrs C’s pension plan. SJP failed to provide any evidence that Mrs C had been informed of that EWC so I didn’t think the charges were fair. In response to the provisional decision SJP has provided some additional information. It said that Mrs C also received some further advice from SJP later in the year, in November 2020. That advice related to the payment of a one-off contribution to Mrs C’s pension savings followed by the payment of regular monthly contributions. The information given to Mrs C as part of that advice told her that these monies would also be subject to an EWC if they were transferred to a different provider. But the EWC rates were different. Mrs C was told that the EWC for these monies would be 6% in the first year, and that the charge would reduce by 1% per annum. SJP has confirmed the findings in my first provisional decision that there were no grounds on which to impose an EWC in relation to the pension savings Mrs C transferred in to the firm in June 2020. So it says that the EWC it has imposed on Mrs C’s recent transfer to another provider only relates to the contributions that have been made since November 2020. In relation to those contributions, both one off and regular monthly contributions, Mrs C was given some information about the operation of the EWC. The information contained in the advice report SJP provided explained that each of the additional contributions would be subject to an EWC. And it set out both the starting point for the EWCs and how they would reduce each year, until they were extinguished by year six. Given the complexity of the EWC calculation I have asked SJP for further information about how it was calculated. Although I simply repeat below the explanation that SJP has given to me, I have carefully reviewed the basis on which the calculation has been made. And I find it to be in line with the information given to Mrs C at the outset. SJP has explained that additional contributions made into Mrs C’s Retirement Account consisted of a single contribution followed by a series of 48 monthly regular contributions from 2020 to 2024. When the transfer out was processed in November 2024 the EWCs it applied related to the single contribution (made in 2020) and the regular contributions. On both this single contribution and the regular contributions, the charges set up included EWCs at a rate of 6% in the first year, reducing by 1% each year until none applied after 6 years. As the single contribution was over four years old on 7 November 2024, the EWC in respect of this contribution was 2% of its value of £2,272.98, equal to £45.46. As the regular contributions were paid for a period of under 5 years, each individual contribution made had its own EWC period. At the point the transfer was made, some contributions were subject to an EWC rate of 6% (i.e. those made within the prior 12 months), some on 5%, some 4%, 3% and 2% (those made between 4 and 5 years earlier). The average EWC rate across the regular contributions, weighted by the value attributable to contributions at each level, was 4.47% at the point the transfer was made. The amount transferred out from these investments came to £16,499.75, incurring an EWC of £737.38 (4.47% of the amount withdrawn). The total EWC was therefore £782.84. So I’m satisfied that – when Mrs C received advice from SJP about making additional contributions to her pension savings to SJP, she was made aware of the EWC and when and how it would apply. I think the explanation was clear and SJP confirmed that the EWC would apply within the first six years if Mrs C wanted to transfer her

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pension away. And since SJP has confirmed that the only way that this advice charge could be taken was to spread it over the first six years – it has said there were no other options – I think it’s fair and reasonable for it to apply the charge in order to obtain the fees it expected to make as its compensation for the advice it gave in 2020 about making further contributions to the plan. But Mrs C has referred to the FCA guidelines around early exit charges and says that, as she thinks SJP’s EWC is an ‘exit charge’, those guidelines should apply here. Mrs C is correct that in 2017 the FCA, building on its treating customers fairly principles, introduced a restriction on early exit charges. The Conduct of Business Sourcebook (COBS) 19.6A confirms the regulation in relation to a member joining or incrementing benefits under a pension scheme on or after 31 March 2017. It says Restriction on early exit charges on a member joining or incrementing benefits under a scheme on or after 31 March 2017. (1) A firm must not: (a) impose; or (b) include in the arrangements relating to a personal pension scheme or stakeholder pension scheme any provision for the imposition of an early exit charge on a member of the scheme. (2) This rule applies in relation to a member who entered into a contract or other arrangement on or after 31 March 2017 providing for: (a) a right to benefits resulting from contributions to the scheme; or (b) an increment to benefits resulting from contributions to the scheme, but only in respect of the member’s benefits under that contract or other arrangement. But in this case I don’t agree that SJP’s EWC is an early exit charge as described above. I think an early exit charge is designed to cover any penalties that might be imposed purely at the time a customer wants to transfer or draw their benefits. SJP’s EWC wasn’t defined in that way as it was clearly explained as a charge that would be imposed for the loss of fees it had already earned but not received. SJP explained its initial advice charge was to “cover all of our expenses incurred in providing, checking and guaranteeing the suitability of your advice”. I think SJP carried out those tasks when it advised Mrs C on making additional contributions to the plan but it didn’t take all its charges for that work at once – it spread them over the first six years of the term of the plan. SJP has explained that this was to help the investment growth of the plan. It isn’t for me to comment on such commercial decisions that a business may make – but I would expect SJP to have explained the effect of this decision. And I think it did that – as confirmed above – when it stated how it would recover those charges – within the first six years of each contribution being made, using the EWC. So I think there is a distinct difference between the two charges here. I think the early exit charge is designed to compensate a provider for the work it might have to do in transferring, converting or paying out a customer’s pension benefits. Whereas the EWC is a charge to cover services that have already been carried out – but where the full initial cost of the work involved hasn’t been taken. In this case the EWC ensured those costs could be recouped later on if Mrs C decided to transfer her pension savings within the six year period.

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So I don’t currently think SJP has done anything wrong and I think it was entitled to charge the EWC when Mrs C decided to transfer her benefits elsewhere. I won’t be asking SJP to remove the charge in line with the FCA’s guidelines on early exit charges because I don’t think those apply here. Once again I invited both parties to provide us with any further comments or evidence in response to my provisional decision. SJP hasn’t provided me with anything further. Mrs C doesn’t agree with my second provisional decision. Although I am only summarising here what she has said, I want to reassure Mrs C that I have read, and carefully considered, her entire response. Mrs C has said that she still thinks that the deduction of the EWC was unfair. And she asked that some attention was also given to the linked complaint made by her husband. 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. As I set out in my provisional decision, in deciding this complaint I’ve taken into account the law, any relevant regulatory rules and good industry practice at the time. I have also carefully considered the submissions that have been made by Mrs C and by SJP. Where the evidence is unclear, or there are conflicts, I have made my decision based on the balance of probabilities. In other words I have looked at what evidence we do have, and the surrounding circumstances, to help me decide what I think is more likely to, or should, have happened. And I repeat my reflections on the role of this service. This service isn’t intended to regulate or punish businesses for their conduct – that is the role of the Financial Conduct Authority. Instead this service looks to resolve individual complaints between a consumer and a business. Should we decide that something has gone wrong we would ask the business to put things right by placing the consumer, as far as is possible, in the position they would have been if the problem hadn’t occurred. I understand why Mrs C is disappointed with my findings in the second provisional decision. But I set out in that decision why I thought SJP had acted fairly when the EWC had been deducted from her pension transfer. I thought that SJP had clearly set out the charge when Mrs C was given advice about making the additional pension contributions. And I thought that the way SJP had calculated the charge was fair and that it didn’t form an early exit charge as set out in the regulator’s rules. I haven’t seen anything that would make me think that I should change those conclusions. So I don’t think SJP has done anything wrong and I think it was entitled to charge the EWC when Mrs C decided to transfer her benefits elsewhere. I won’t be asking SJP to remove the charge in line with the FCA’s guidelines on early exit charges because I don’t think those apply here. My final decision For the reasons given above, and in my second provisional decision, I don’t uphold the complaint or make any award against St. James's Place Wealth Management Plc.

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Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs C to accept or reject my decision before 23 April 2026. Paul Reilly Ombudsman

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