Santander UK Plc · DRN-6195316

The complaint Mrs L has complained that Santander UK Plc (“Santander”) has overcharged her for investment advice in 2025. She believes Santander should have used its discretion to reduce the fee because she was an existing client who was reinvesting funds from a matured investment and the work it carried out for the new investment didn’t justify the level of the fee charged. What happened In September 2022 Mrs L and her husband met with Santander for financial advice. Mr L has also raised a similar complaint which is being dealt with under a different complaint reference. A suitability letter was issued on 20 September 2022 that shows that following three meetings in the previous month, Santander advised Mrs L on the investment of £750,000 that she held on deposit. Mrs L’s recorded objective was to obtain greater potential growth than a deposit account, in order to combat inflation, over a five-to-ten-year term. The suitability letter noted that although Mrs L wanted to leave the investment decisions to the experts she didn’t want to pay for ongoing reviews as she preferred to check on the progress of her investments online and pay a fee for a one-off review if she felt she needed it. The letter also explained Santander did not offer ongoing reviews of the investment. Santander recommended Mrs L, and her husband, split the funds for investment across a number of Structured Capital At Risk Products (“SCARPs” which had an annual “kick out” option. That meant the plans would end earlier than the fixed term they were set up for, if the FTSE 100 reached a predetermined level by the first anniversary. A cost summary was included in the letter. It confirmed that the costs associated with making the investment of £750,000 were: • £1,000 one off product charge for SCARPs and Multi Index funds (equivalent to 0.13% of total funds invested) • £5,000 one off advice fee (0.67% of the funds invested) No ongoing charges applied to the SCARPs. As Mrs L received advice jointly with her husband Santander apportioned the advice charge between the two of them, and Mrs L paid £2,597. I can see that Mrs L also signed a summary of instructions declaration which confirmed she’d accepted the advice and the charges that applied and authorised the payment of those charges. The documents also show Mrs L was aware the investment would be set up on Santander’s “Investment Hub” which provided her with the option to make subsequent

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investments on an “execution only” basis if she did not want advice. The declaration also provided her with a twenty-one-day cancellation period if she changed her mind. The plans “kicked out” early in 2024 so Mrs L reinvested the proceeds in another SCARP after paying for advice again from Santander. In 2025 that SCARP matured due to the annual kick out option being realised. On 8 April, 24 April and 6 May 2025 Mrs L met with the adviser from Santander again and following these meetings Mrs L was provided with new advice documented in a suitability letter dated 6 May 2025. This letter explained that a discussion had taken place about the services Santander offered and it had recommended the advice service. It also confirmed Mrs L had been provided with a document entitled “About our Financial Planning Service” which set out the terms of the service. The recommendation that was set out, along with the reasons why, was for Mrs L to invest £201,683 of a total of £500,000 that she wanted to invest, along with her husband, in a Stocks and Shares ISA Atlas Portfolio 6IA. This included the matured proceeds of the 2024 SCARP as well as additional funds. The letter also explained that an ongoing suitability review service was available at a fee if she wanted to use that service in the future. The costs and charges for the investment were also clearly set out. Based on the total investment of £500,000 there was a one-off advice fee of £10,000 which was 2% of the amount invested. That was again apportioned between Mrs L and her husband and Mrs L paid £4,033 based on the funds she invested. There were no other one-off charges for investing. After agreeing with the advice and proceeding with the investment Mrs L made Santander aware she was unhappy with the initial fee she had paid for the investment in 2025. Santander then raised a formal complaint for Mrs L and it provided its final response on 27 June 2025 explaining why it didn’t uphold the complaint. It said that it had been clear about the service it offered and the cost of that service and that Mrs L had decided to proceed with the recommendation after receiving that information. It also explained that there was no obligation to pay the advice charge if she didn’t accept the advice. Santander also said that the 2025 investment was not simply a reinvestment of matured funds as Mrs L had added further funds and invested in a different product after a full review of her circumstances. Santander also acknowledged that it had discretion to charge a 1.5% reinvestment fee in exceptional situations, but it explained that it had decided not to do so in Mrs L’s case because of the level of work and investment amount. Mrs L didn’t believe Santander’s answer was fair, so she referred her complaint to this Service in September 2025 where it was assessed by one of our investigators who didn’t uphold the complaint. She was satisfied that the cost of the advice in 2025 had been made clear to Mrs L at the time and she agreed knowing the full details of the charges and the service available to her. Mrs L didn’t agree with the assessment. She responded with the following: • Santander had persistently contacted Mrs L (and her husband) to reinvest their

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money. • A sensible compromise would have been for Santander to agree a fee of 1.5% on the reinvestment of the kick out plans which would still have been a fee to Santander of £7,236.51 for very little work. • The 1.5% fee was never mentioned or offered by Santander at the time. • Mrs L never asked for the further monies to be added to the investment – that was driven by Santander, and she would have just reinvested the proceeds of the kick out plans if that had been offered at a fee of 1.5%. • There has been no explanation for the excessive increase in fees in the space of three years for very little additional work. The investigator considered Mrs L’s comments but wasn’t persuaded to change her initial outcome. So, as no agreement could 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. I’ve taken into account relevant: law and regulations; regulatory rules; guidance and standards; codes of practice; and (where appropriate) what I consider to have been good industry practice at the relevant time. Where the evidence is incomplete or inconclusive I’ve reached my decision based on the balance of probabilities – in other words, on what I think is more likely than not to have happened given the available evidence and wider circumstances. First it’s important to make clear that this Service isn’t able to comment on the charges a firm implements for providing its services nor can we involve ourselves in a firm’s genuine commercial decision. So while Mrs L wants this decision to consider whether the advice fee charged was fair and reasonable this isn’t something this Service can pass comment on in a detailed manner. All I can do is decide whether the fee was correctly charged and whether the costs of the advice and services from Santander were made clear to Mrs L and ensure she wasn’t mis-led in anyway. We don’t have the ability to look into Santander’s internal workings regarding its charging structure or to scrutinise it - that would be for the Regulator to do. Overall, having looked at all the information provided to me I am satisfied that Santander reasonably categorised Mrs L’s investment in 2025 as a new investment, therefore triggering a new full advice fee. I am also satisfied that the advice charge was made clear to Mrs L during the advice stage. And that she accepted the advice knowing what the charge would be. Looking at the document entitled “About our Financial planning service” I can see that it set out the advisory charges for a lump sum investment. The details show the maximum fee on a lump sum of £500,000 under Santander’s terms was £12,500 or 2.5% of the investment amount. The suitability letter also set out the cost of the advice for Mrs L was £10,000 in total or 2% of the investment amount. Furthermore, it was also explained after the recommendation had been made that Mrs L didn’t have to accept the advice and if she didn’t, she wouldn’t have to pay the charge, and that there was a cancellation period during which she could cancel

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acceptance of the advice and not pay the fee. So it appears that Santander made it clear that Mrs L had the choice to decline the advice or change her mind and not pay the fee. In view of this I am satisfied that the fees Mrs L was charged for this piece of advice was made clear to her at the time, therefore given she accepted the advice I can only assume from this that she willingly accepted the advice having been fully informed of the costs and the services provided. I appreciate Mrs L feels that Santander could have reduced the fee at its discretion. I do agree with this, and Santander has said this is something that is within its gift. However, this wasn’t something Santander was obligated to do. So it was entitled to charge a full advice fee if it felt that was appropriate for various reasons and in this situation, it clearly felt that the full advice process had to be completed. I also don’t think Santander was obligated to inform Mrs L of the potential to be charged 1.5% in certain circumstances. Again this was applied at its discretion so it follows Santander could use its discretion to inform her of this fact or not. Having said that, the information noted above shows me that a reduction to the maximum fee that could be charged was applied given, Mrs L (and her husband) paid a total of £10,000 for the investment advice. So it seems Santander used an element of discretion regarding the charging in its dealings with Mrs L, all be it not to the level Mrs L is now saying she wants. Mrs L feels that instead of a full advice fee she should have just been charged for a review as she doesn’t consider the investment in 2025 to have been a new investment. However, I am satisfied that it was reasonable for Santander to class this investment as a new one. The investment was a different one to what Mrs L had taken out in 2024 and while she was investing the maturity proceeds of her previous plan she also added to the amount that was to be invested. Furthermore, there was no existing investment at that point in time because her plan had ended in line with the “kick out” feature, as per the terms and conditions of the investment. Therefore, it seems reasonable to me that Santander viewed this as a new investment and therefore the full advice process was implemented thereby triggering a charge for full advice. In my view this is a commercial decision but one that doesn’t seem unreasonable. So I am satisfied that Santander was entitled to charge the fee for the full advice process and that it was reasonable for it to do so. I know Mrs L feels Santander didn’t do a lot of work in return for the fee it earnt through this investment. However, I am satisfied that a full suitability assessment in relation to the new investment took place and that it was reasonable for this to have happened. Regardless of whether Santander already had the information, it was required by the Regulator to go through the full advice process in certain situations, such as this one. And if it didn’t do this it would have been in breach of the requirements. It seems Santander decided that given the nature of the investment it needed to carry out a full and proper suitability assessment of the new investment against Mrs L’s personal and financial circumstances as well as review her attitude to risk and her needs and objectives. Also while I appreciate a full fact find and suitability assessment had taken place only about a year before, an individual’s circumstances can change over a twelve-month period, and it would be wrong for any firm to assume an individual’s requirement for investing were exactly the same as before especially when a new and different investment was involved. Overall, therefore while Santander could have reduced its fee in relation to Mrs L’s 2025 investment it wasn’t obligated to do so. I am satisfied with Santander’s reasoning as to why the investment was categorised as a new one and this seems reasonable to me. I am also of the view that the fees and charges were made clear to Mrs L at the time and she knew what she would be charged if she accepted the advice. And while Mrs L feels the charge wasn’t

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fair or reasonable, based on the information I have seen and working within the remit of this Service, I think it was. Other considerations In relation to the additional points Mrs L raised in response to the investigator’s assessment, as noted above, I appreciate what she has said however, she hasn’t complained about the suitability of the advice to invest in the kick out plans or to invest further monies above the maturity proceeds of the kick out plan in 2025 prior to this point in time and so this isn’t something I can address in this decision. My final decision For the reasons explained above, my final decision is that I don’t uphold this complaint and I make no award. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs L to accept or reject my decision before 28 April 2026. Ayshea Khan Ombudsman

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