The Financial Ombudsman Service (FOS) has sided with a client who alleged that St. James’s Place Wealth Management’s (SJP) delayed withdrawal of the gift and the loan bond plans - of which he was a trustee - cost him on the bonds’ gains during the delay as well as the opportunity to reinvest.
The client, Mr B, said he instructed SJP to withdraw all the funds from the gift and the loan bond plans in September 2020, but the money was not sent to his trust account until November - around 9 November for the gift trust funds and 17 November for the loan trust funds.
Pertinently, SJP paid the value of the bonds as they were on 16 October 2020, which were higher than if the withdrawal had been completed in September. But Mr B wished to receive the value the bonds had in November, on the day he received the money, as their price rose during the delay period.
In response to Mr B's complaint, SJP offered to pay simple interest at 8% per year on the value he would have received in September, for the delay period to November, which was rounded up to £2,500. This offer was in addition to giving him the value the bonds had in October 2020.
The client rejected the offer. The matter was brought to the ombudsman, who sided with the client and his complaint, but still found that SJP's offer was a "fair and reasonable resolution to this complaint".
As to the three-week delay in processing Mr B's instruction for the loan bond, the ombudsman said: "I think SJP should have been able to anticipate what would be needed when Mr B came to withdraw the money, and set something up to be able to process that quicker than they did."
When calculating fair compensation for Mr B as a result of this delay, the ombudsman said SJP's offer using the court rate of 8% over the delayed period to be reasonable, particularly given that the interest figure has been rounded up to the nearest £500 by SJP, which "goes some way to acknowledge the emotional impact on Mr B in this case".
The ombudsman ordered SJP to pay compensation of £2,500 to the client. "Overall, I've decided it'll be fair to regard giving Mr B the October value for the bonds - rather than the September value he'd have received if there'd been no mistakes - as putting right that emotional impact, and restoring the good will with SJP."
When contacted for comment, an SJP spokesperson said: "There' s nothing to add over and above what has been published. The ombudsman has agreed that the offer SJP made to the client was fair."
