Evolution FS Ltd · DRN-6169032

The complaint Mrs S complains that Evolution FS Ltd trading as Evolution Financial Services failed to deliver the annual reviews of her pension that she’d paid for. What happened The background to this complaint is well known to both sides, so I’ll keep my summary of events brief. In May 2020 Mrs S started a pension plan. She had an agreement with Evolution FS to provide ongoing services on her pension in return for an ongoing advice charge (OAC) of 0.6% of the pension’s value each year. Mrs S continued to pay an OAC on her pension until June 2025 when she asked for it to be switched off. At that time, Mrs S also raised a complaint to Evolution FS. In her complaint Mrs S said that despite paying OACs she hadn’t received regular reviews of her pension for a number of years. She said over the past five years she’d only received one review. Mrs S asked to be reimbursed for the reviews which had not taken place, putting her back into the position she would have been in had the charges not been taken. In response to Mrs S’s complaint, Evolution FS said it reviewed her file and correspondence history. Having done so, it said full annual reviews took place in 2021, 2022 and 2023. In addition, it had written to Mrs S in 2025 inviting her for a review, but she hadn’t responded. It said further to the reviews it had found several pieces of correspondence from Mrs S between 2021 and 2024, including a positive review Mrs S had left for her adviser on an external website. Evolution FS said in light of its findings it wouldn’t refund the OACs but had arranged for them to be switched off so no further OACs would be collected. Mrs S wasn’t happy with Evolution FS’s response and so she brought her complaint to our Service. Our investigator looked into things and partially upheld Mrs S’s complaint. He said he was satisfied an annual review had taken place in October 2021, July 2023 and it had been offered in April 2025. But he didn’t think Evolution FS had delivered the service Mrs S was due in 2022 or 2024. Our investigator set out how he thought Evolution FS should refund the fees with missed investment returns added. He also said it should pay Mrs S £150 for the distress and inconvenience caused. Our investigator’s opinion on the complaint wasn’t accepted by either side and so, the complaint has been passed to me for a decision.

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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. 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. In February 2025 the Financial Conduct Authority (FCA) set out its findings from a recent review of whether financial advisers were delivering the ongoing advice service that consumers had paid for. Of relevance to this complaint, it said that where a firm had been ready, willing and able to provide suitability reviews, but a client had consciously declined the service in any given year, it considered it less likely that redress would be paid. However, the FCA went on to say that where a client had declined a service over a number of years, firms should discuss with the client whether continuing the service was still in the clients’ best interests. The findings went on to say that there may also be circumstances where firms have made reasonable and proportionate attempts to engage with clients to conduct suitability reviews without success. The regulator said it expected firms to have some form of engagement with clients to conduct a review. If that was the case, the regulator expected redress to be less likely. However, it said firms should still consider whether an ongoing service is in its client’s best interests if they persistently don’t engage. Mrs S’s husband, Mr S, worked for Evolution FS which has been the subject of some of its submissions. But I’d like to be clear that Mrs S was a retail client of Evolution FS. So, she’s afforded all the rights and protections of a retail client. My decision will therefore focus on the agreement Mrs S had with Evolution FS to provide an ongoing service on her pension and whether Evolution FS provided that service. I’m satisfied the employment of Mr S doesn’t have an impact on the merits of this complaint. Evolution FS has sent us a signed client agreement from Mrs S which sets out the level of service she was due to receive in exchange for 0.6% of her pension each year. Mrs S had selected ‘Service A’ which was described as having a delivery style of ‘Face to Face’ and included the following: Annual review meetings including: Review of objectives Review of risk profile Review of asset allocation (if required) Review of tax changes Review of suitability of your investments Updates and valuations Access to our administration team Ongoing access to your qualified financial adviser Professional expertise and due diligence on products and investments Portfolios and/or solutions regularly reviewed and rebalanced where appropriate Quarterly newsletters, quarterly investment market updates and budget updates where relevant Liaison with accountant / solicitor (if required) The cost of the service was 0.6% per year with a minimum cost of £1,000.

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There was another option – Service B - for a ‘remote’ ongoing service. That service came at the same cost of 0.6% per year for the same level of service listed above, albeit reviews would be conducted remotely. The only difference in the service was that it had a lower minimum charge of £500 (compared to the £1,000 minimum for the face to face service). The plan was taken out in May 2020 and each review would be due on the anniversary each year having been paid for in advance by deductions from the plan. So, the first review would be due in May 2021 and so on. However, I’ve also kept in mind that it’s not uncommon for circumstances to mean reviews aren’t provided on the exact anniversary, but broadly speaking a review should have happened each calendar year. I’ve gone on to consider the circumstances of what happened in each year that a review was due to decide whether a refund is due. 2021 There seems to be no dispute that a review took place in October 2021. Mrs S says that the review was ‘late’ as it was due in May 2021. That’s not disputed either. It’s not uncommon for reviews to take place at intervals of more, or less than 12 months for a variety of reasons. When considering if any compensation is due, I’ll take into account that the review due in 2021 was paid for by 12 months’ of deductions ending in May 2021. 2022 On 1 April 2022 Mrs S emailed Evolution FS to ask if she’d received a Profit Share award on her pension. She sent a chaser email on 10 April 2022. Evolution FS responded on 10 April 2022. Amongst other things it said ‘I have attached an up to date report which shows the profit share has been added of £372.40 – overall the plan has done well – up from £205k when we started to £247k’ A copy of an annual report from Mrs S’s pension provider was attached. When considering Evolutions FS’s client agreement with Mrs S, I’m not persuaded the copy of the document produced by Mrs S’s pension provider demonstrates Evolution FS met its agreement with Mrs S in 2022. Mrs S and Evolution FS hadn’t held a meeting, either in person or remotely. The report was simply produced in response to a query from Mrs S about a Profit Share award. Her personal circumstances and objectives weren’t reviewed to ensure her investments remained appropriate and I’ve seen no evidence Evolution FS offered to do so in that year. Unlike 2021 and later in 2023 there aren’t any meeting notes of any discussion between Mrs S and Evolution adding further weight to my conclusion that a review meeting didn’t occur. Evolution FS have provided a copy of another similar report from Mrs S’s pension provider dated September 2022. But again, this doesn’t demonstrate to me Evolution FS provided the service it ought to have done. 2023 Evolution FS have also provided a copy of an email trail between Mrs S and her adviser from June and July 2023. Mrs S’s adviser from Evolution FS emailed her on 27 June to say:

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‘We are overdue an annual review/catch up – happy to do this face to face or by a call whichever you prefer. Perhaps you can let me know some dates from mid-July onwards that would be suitable for you.’ In response Mrs S replied (amongst other things): ‘How does the 14th or 21st work for you, say around noon, via Teams?’ A meeting was subsequently arranged for 21 July 2023. From the email trail I’m satisfied the purpose of the meeting was understood by both sides to be an annual review of Mrs S’s pension. In her submission to our Service Mrs S has pointed out that she’d paid for face to face meetings. But the emails demonstrate the option of a face to face meeting was presented to Mrs S and she chose for it to be held remotely. And the remote level of service Evolution FS provided its clients came at the same cost as its face to face service. So, Mrs S wouldn’t have saved any money by switching to ‘Service B’ – the remote service – even if it was offered. Mrs S’s funds were at such a level that it exceeded the £1,000 minimum for ‘Service A’ regardless. Evolution FS have provided meeting notes dated 21 July 2023 which I’ve seen were also emailed to Mrs S following the meeting. The notes record details of the performance of Mrs S’s plan; her employment; her other pension provisions and contribution levels to her workplace scheme; and details of possible income levels in retirement. It also provided a copy of a report that it had sent to Mrs S before the meeting which said; I've recently carried out a review of your Royal London pension plan for the period covering 1 July 2022 to 21 July 2023. As part of this work. I've looked at: • how your retirement savings have grown since the last review • the contributions made to your plan • the position of your chosen investments and considered their ongoing suitability • how your investments have been managed and the changes that have been made • what would happen to your retirement savings in the event of your death or ill- health • the fees you've paid since the last review • what your retirement savings might be worth • key facts about Royal London I've summarised all my key findings inside this report. Having reviewed the circumstances leading up to the meeting and documentation provided by Evolution FS, I’m satisfied Mrs S received an annual review of her pension in July 2023 in line with her agreement. Therefore, I can’t reasonably ask Evolution FS to refund any OACs that paid for the review in 2023. 2024 Evolution FS acknowledged that a review didn’t happen in 2024. It says due to circumstances around Mr S’s employment with it, there were extenuating circumstances. I don’t find that reasonable. As I’ve already explained Mrs S was a retail client of

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Evolution FS with her own contractual agreement in place to receive an ongoing service. Mr S’s employment ought not to have affected Evolution FS delivering the service to Mrs S. I’ve seen no evidence that Evolution FS offered or attempted to provide Mrs S with an annual review in 2024. Therefore, I’m satisfied it’s reasonable to direct Evolution FS to repay the OACs from 2024 as I’ll set out below. Evolution FS have said that it answered a query from Mrs S in 2024 around employer contributions into her workplace plan. However, I’ve seen no evidence that answering a query as it did was a service included in the ongoing service it was providing her or that simply answering this one query would entitle it to retain the OAC for that year. 2025 On 3 April 2025 Evolution FS’s adviser emailed Mrs S to say it had been a while since they’d caught up on her pension and offered to arrange a meeting ‘in the next couple of weeks’. When Mrs S didn’t respond to that email the adviser sent a chaser email on 17 April 2025. I think Evolution’s emails here demonstrate it was ready and willing to provide an annual review to Mrs S in 2025, but she didn’t engage with it. And when Mrs S raised her complaint in June 2025 asking for the OACs to be stopped, Evolution FS actioned that request. I’ve got no reason to doubt Mrs S received the emails in April 2025 inviting her for a meeting, but in not responding to the invitations, I’m satisfied Mrs S was consciously declining to meet with Evolution FS to review her pension. And in those circumstances, I don’t think it would be fair to direct Evolution FS to refund the OACs at it met the regulator’s expectations to make reasonable and proportionate attempts to complete the review. Conclusion I’m satisfied that its fair for Evolution FS to retain the OACs it was paid for the reviews that took place in 2021, 2023 and 2025. But for the reasons I’ve given, Evolution FS need to refund the OACs for 2022 and 2024. I’ll set out below how it must do that. In response to our investigator’s opinion Evolution didn’t think that an award for distress and inconvenient should be made. But I disagree. The rules I must follow allow me to make an award that I consider to be fair for any distress and inconvenience caused. I believe Mrs S has been caused more than the levels of frustration and annoyance you might reasonably expect from day to day life as Evolution FS failed to provide an important service that she’d paid for. And Mrs S worried about how that might have affected her pension. So, in these circumstances I think it’s fair to make an award of £150 to reflect the distress and inconvenience caused. Putting things right My intention here is to put Mrs S as close as possible back into the position she would have been in but for Evolution FS’s errors. That means putting Mrs S’s pension into the position it would have been in had OACs not been taken in the years that reviews weren’t delivered. The pension would have been higher by the value of the OACs, and any investment returns the OACs would have benefitted from. While the reviewed didn’t always happen on the anniversary of the plan in May each year, each review would have been funded by the previous 12 months of OACs. So, I think fair compensation would be to refund the OACs in the preceding 12 months between June and

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May in each of the years no reviews were delivered. Therefore, Evolution FS must refund the OACs it received between; June 2021 to May 2022. June 2023 to May 2024. To compensate Mrs S fairly Evolution FS must: • Calculate the loss in value of Mrs S's pension due to the deduction of the OACs taken over the period stated above. This will mean also calculating the lost investment returns on each advice fee from the date the fees were deducted to the date of settlement using the following benchmark: FTSE UK Private Investors Income Total Return Index. • It should pay into Mrs S's pension plan, to increase its value by the amount of the compensation. The payment should allow for the effect of charges and any available tax relief. It shouldn't pay the compensation into the pension plan if it would conflict with any existing protection or allowance. • If it’s unable to pay the compensation into Mrs S's pension plan, it should pay that amount direct to her. But had it been possible to pay into the plan, it would have provided a taxable income. Therefore, the compensation should be reduced to notionally allow for any income tax that would otherwise have been paid. • This is an adjustment to ensure the compensation is a fair amount - it isn't a payment of tax to HMRC, so Mrs S won't be able to reclaim any of the reduction after compensation is paid. • The notional allowance should be calculated using Mrs S's actual or expected marginal rate of tax at her selected retirement age. • It's reasonable to assume that Mrs S is likely to be a basic rate taxpayer at the selected retirement age, so the reduction would equal 20%. However, if Mrs S would have been able to take a tax-free lump sum, the reduction should be applied to 75% of the compensation, resulting in an overall reduction of 15%. • Provide the details of the calculation to Mrs S in a clear, simple format. It must also directly pay Mrs S £150 for the distress and inconvenience caused. The compensation must be paid to Mrs S within 28 days of the date Evolution FS receives notification of Mrs S’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. Why is this remedy suitable? I’ve chosen this method of compensation because: • Mrs S wanted Capital growth and was willing to accept some investment risk. • The FTSE UK Private Investors Income Total Return index (prior to 1 March 2017, the FTSE WMA Stock Market Income total return index) is made up of a range of indices with different asset classes, mainly UK equities and government bonds. It’s a fair measure for someone who was prepared to take some risk to get a higher return. • Although it is called income index, the mix and diversification provided within the index is close enough to allow me to use it as a reasonable measure of comparison given Mrs S's circumstances and risk attitude.

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My final decision For the reasons I’ve given, I partially uphold this complaint and direct Evolution FS Ltd trading as Evolution Financial Services to put things right as I’ve set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs S to accept or reject my decision before 12 May 2026. Timothy Wilkes Ombudsman

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