Hargreaves Lansdown Advisory Services Limited · DRN-6026160

The complaint Mr C complains that Hargreaves Lansdown Advisory Services Limited (“HLAS”) failed to appropriately manage the investments held under its Portfolio Management Service (PMS) for his SIPP. He feels the PMS investment strategy hasn’t worked effectively and seeks a refund of the related charges. What happened The background to the complaint will be well known to both parties, so I’ll only give some key details here. Mr C has been a customer of HLAS since 2008 when he transferred to it some existing pensions, totalling around £105,000, and ISAs of around £16,000. They were recommended to be invested in HLAS’s PMS discretionary managed investment service, in line with his agreed “more aggressive, speculative approach” to risk, to achieve his objective of capital growth through an equity allocation of around 90%. In addition to the initial charges for the advice, it was agreed there’d be an annual charge for investment management, annual reviews and ongoing support. Mr C remained happy with this arrangement until late 2023 at which point his disappointment with the performance of his investments led him to move to self-managing them. He felt the performance, specifically since 2019, had been poor due to HLAS ‘taking its eye off the ball’ and neglecting to manage the portfolio effectively. Mr C made a formal complaint, but it wasn’t upheld. HLAS explained that the portfolio choice had been agreed at outset and then managed in line with the parameters of Mr C’s agreed risk profile. The portfolio funds were chosen through their own research, and it stressed that performance was not guaranteed. It also noted that if Mr C had been unhappy with the service or his circumstances had changed such that the portfolio was no longer appropriate, he could’ve voiced concerns but hadn’t done so in any of the reviews leading up to the complaint being made in 2024. The complaint was referred to this service, but our investigator also didn’t think it should be upheld in respect of the management of the investments. In short, he concluded that while there may have been, as Mr C had noted, alternative funds available that were lower in cost or had outperformed other funds chosen by HLAS’s Discretionary Fund Managers, it was nevertheless the case that the funds that were chosen were consistent with its strategy and the asset allocation was in line with the agreed profile. In respect of Mr C’s concerns about the ongoing advice service for which he’d been charged, HLAS did accept that there’d been a period between his 2020 review, held January 2021, and his 2023 review, held July 2023, during which the service hadn’t been provided. As such, it offered to refund the related charges, adding simple interest at 8%. The investigator felt this was fair and reasonable in the circumstances. He also noted a payment of £250 that HLAS had already made to Mr C as gesture of goodwill to cover fees that were deducted in the period in 2024 when he transitioned from the PMS service to HLAS’s execution-only service to self-manage the investments.

-- 1 of 3 --

Mr C, although accepting of HLAS’s offer regarding the ongoing service, didn’t agree with the investigator regarding the PMS. He maintained his view that HLAS had neglected to manage the portfolio effectively post-2019 and in doing so had acted contrary to the agreed mandate for investment. As no overall agreement could be reached the matter was referred to me to review. 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. Having done so, I’ve come to the same conclusions as those reached by the investigator and I’ll explain why below. I want to assure Mr C I’ve read and considered everything on the file. But that said, I’m satisfied I don’t need to comment on every point raised to reach what I consider to be a fair and reasonable decision. Where I’ve chosen not to comment on something, it’s not because I haven’t considered it. It’s because I’ve focused on what I think are the key issues. That approach is in line with the rules we operate under. Turning first to the issue of the ongoing service, as Mr C has confirmed he’s prepared to accept HLAS’s offer, which I agree is fair and reasonable in the circumstances, I shan’t comment further and will simply set out confirmation of this below. In respect of the crux of the complaint, HLAS’s discretionary management of Mr C’s investment since 2019, I’ve seen nothing that persuades me that HLAS acted incorrectly in this respect. HLAS appear to have continued to manage the portfolio as it had always done, in line with the agreed mandate of focussing heavily on equities to try to achieve Mr C’s capital growth objective. I note his concerns with the apparent focus on what he sees as a limited number of funds within the portfolio and a failure to change these, either for alternative funds that have subsequently demonstrated better performance or have lower charges. But as HLAS explained to him, the holdings within the primarily multi-manager funds that constitute the portfolio have not remained static. As would be expected, there’s been continuous management of the assets of those funds since 2019 in the same way there was prior to that. And further it has confirmed that there is ongoing consideration given to charging and how that can be made more efficient. It’s unfortunate that when in August 2023 Mr C was provided with the historical values of his SIPP for 2013 through to 2023 a typo significantly increased 2019’s value, giving it as £293,373 instead of the correct figure of £239,373. I think it’s fair to say that, even if this didn’t solely prompt Mr C’s complaint, it undoubtedly would’ve exacerbated any concerns he might already have been experiencing about performance. The failure of his SIPP to regain this misquoted figure was certainly something he highlighted in several of his early communications with HLAS – in an initial message sent on 28 December 2023 and again in a letter of 14 May 2024 that formed part of the ongoing correspondence about his complaint prior to the referral to this service. But irrespective of this error, Mr C was nevertheless entitled to voice concerns about performance and raise the issues he has. However, as I’ve said, I don’t think it’s been shown that HLAS acted incorrectly or unreasonably. The significant changes that HLAS has highlighted in the way the HL Multi-Manager Special Situations fund (the largest holding in Mr C’s SIPP) was invested between 2022 and 2024 are a good example of actions that

-- 2 of 3 --

indicate that it was not neglecting the fund individually nor the portfolio as a whole as Mr C has suggested. Rather, it was carrying on the process of discretionary management as it had been since Mr C started investing with HLAS. In a situation like this, by the nature of the service being discretionary with decisions left to others, there will always be the possibility that alternative decisions might have led to a better (or worse) outcome. But I would only uphold a complaint of this kind where I was persuaded that a business had failed to provide the service it committed to at the outset. And I don’t think that’s the case here. Putting things right In line with its offer already made, HLAS must refund the ongoing adviser charges for the period between Mr C’s 2020 review held in January 2021 and his 2023 review held in July 2023 for the annual reviews that weren’t undertaken. To this should be added interest at 8% simple per annum, from the plan anniversary date for the years that service was not provided to the date of settlement. While the additional 8% may differ from the actual returns, I’m satisfied it represents a pragmatic approach to resolving the issue and is therefore reasonable in the circumstances. My final decision For the reasons given, my final decision is that I uphold the complaint, in part, and direct Hargreaves Lansdown Advisory Services Limited to compensate Mr C as set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr C to accept or reject my decision before 20 April 2026. James Harris Ombudsman

-- 3 of 3 --