Westminster Wealth Management LLP · DRN-6292446

The complaint Mrs E, via her representative, complains that Westminster Wealth Management LLP (‘WWM’) failed to advise her about the high-risk nature of a property fund investment when carrying out reviews of her investments and as part of its ongoing duty towards her. She says had it done so, it would have prevented her from incurring substantial losses. What happened The details of this complaint are well known to both parties, so I won’t repeat everything again here. The following is a summary only of the background to the complaint to provide some context. In 2017, Mrs E made an investment in connection with a property fund (‘the Fund’) by way of a mezzanine loan. The loan was made jointly with the friend of her husband, who were both fellow investors in the Fund and customers of WWM. The loan has not been repaid. In 2020, Mrs E and the other joint borrower complained to WWM about the advice they say they received in connection with the loan. They said an adviser, who I shall call Mr X, advised them to make the loan-based investment. Although Mr X also had a role in connection with the Fund, they said they believed Mr X was advising them in his role at WWM, and that advice was unsuitable. WWM didn’t uphold the complaint. In summary it said Mr X wasn’t an employee of WWM – he was a self-employed consultant who only provided account management services to clients. It said he wasn’t allowed to give regulated advice in his role at WWM – he’d only given information. It said if he had given any advice, it was given in a different capacity. It also said advice about commercial loans isn’t a regulated activity. We ultimately decided that it wasn’t a complaint we could consider – it was outside our jurisdiction on the basis that if any regulated activity had taken place in connection with the loan, WWM wasn’t responsible for it. This separate sole, but connected complaint, was set up to consider the point raised in the original complaint about WWM’s alleged failure to point out the high risk and unsuitable nature of the investment to Mrs E as part of its ongoing advice duty and responsibility. WWM said that its involvement with Mrs E was limited. It provided a one-off piece of mortgage advice, but it didn’t have an advisory conversation, or engage in any financial planning correspondence with her, and hadn’t put a service or fee agreement in place. But it said that at a later stage Mrs E’s husband sought advice on an investment technically held in her name and the fee for that advice was taken from the investment in question. But it said it didn’t provide any wider advice on her investments or wider assets. Mrs E’s representative was unclear why we were considering this complaint in the sole name of Mrs E when the original complaint was made on a joint basis with the other borrower.

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Our investigator looked at the matter, and they concluded Mrs E was not an eligible complainant under our rules, so it fell outside of our jurisdiction. They said she wasn’t a customer for the purpose of this complaint. There was no relationship with WWM whereby it had a duty to provide Mrs E with ongoing advice. They also said they were satisfied it was appropriate for this complaint to be in Mrs E’s sole name. While the advice complaint was rightly in joint names because of the joint lending, ongoing advice is provided individually, so they said it’s right Mrs E is the sole complainant for this complaint. Mrs E disagreed. She maintained that this complaint should be considered on a joint basis with her co-borrower as in the original complaint made – they were joint investors in relation to the advice to invest and they should be treated the same in respect of ongoing advice. She said the original complaint wasn’t made on the basis that advice on suitability should only have been given in annual reviews. In terms of whether she was a customer of WWM, she said whether she was officially a client is not determinative of whether or not she is a customer and therefore an eligible complainant. And she referred to several examples submitted as part of the original complaint as evidence of there being an advice relationship and WWM advising on her investments. She said WWM didn’t formally establish a client relationship, but it ought to have done in the circumstances. She said in any event, if it is deemed there was no such relationship, WWM owed her a duty on the basis that financial advisers can owe duties to third parties as in Gorham v British Telecommunications Plc [2000] 1 W.L.R. 2129. Because the investigator wasn’t persuaded to change their opinion, the matter was passed to me to decide. I issued my provisional decision of 12 March 2026. I explained here why I thought Mrs E was an eligible complainant and so her complaint was one I could consider. But that in considering the merits of it, I didn’t intend to uphold it because I didn’t think WWM had done anything wrong. I’ve included the relevant extracts from my provisional decision as it forms part of my final decision. Copy of my provisional decision findings What I’ve provisionally 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. And 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. Why I think we can consider this complaint Before I consider the merits of the complaint and what I think is fair and reasonable in the circumstances taking into account the above considerations, I firstly need to address the matter of our jurisdiction and our power to consider the complaint, which in this case centres on whether Mrs E is an eligible complainant under our rules.

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The rules by which we operate are set out in the Dispute Resolution or DISP section of the regulator, the Financial Conduct Authority’s (FCA) handbook. The relevant section of the rules in this case and whether a complainant is eligible is set out in DISP 2.7. There are two parts of the rules here and a complainant must meet both parts to be eligible. The first, DISP 2.7.3R, sets out the persons which meet the definition of an eligible complainant. And I’m satisfied that Mrs E meets the definition of an eligible complainant on the basis she is a consumer – that is, she is: ‘any natural person acting for purposes outside his trade, business or profession.’ The second part – DISP 2.7.6R – goes on to say that: ‘to be an eligible complainant a person must also have a complaint which arises from matters relevant to one or more of the following relationships with the respondent...’ The first relationship listed here is that of a customer of the respondent. It is this relationship aspect of the eligibility, which is being contested. Customer is not defined within the rules. So, I’ve taken the ordinary meaning. I think a customer is taken to mean someone who is, or has, been obtaining products or services from the business complained about. I think Mrs E meets this definition in this case. I’ll explain why. I understand that Mrs E’s husband was the main party WWM was interacting with in relation to advice and ongoing advice about his family’s investment portfolio. And it was he with whom WWM had a formal client agreement for ongoing advice. But the absence of such an agreement in Mrs E’s name, does not, in my view, mean she wasn’t a customer of WWM. Both parties are aware of the evidence submitted in this case, so I won’t repeat it all here. But there are several example emails of WWM providing Mrs E’s husband with regular valuation statements of her investments. And in 2017, there is an email relating to advice about transferring non-ISA assets in Mrs E’s husband’s name to her to facilitate the crystallisation of a gain to use her capital gains allowance. While again, this might have been advice given through Mrs E’s husband, it was nevertheless advice in relation to Mrs E and investments in her name. I think this particular piece of advice is what WWM referred to when it said Mrs E’s husband sought advice in respect of an investment ‘technically held in Mrs E's name’ and it provided her husband with that advice, with fees in respect of the advice taken from the investment in question. I don’t think WWM’s apparent attempt to draw a distinction here by saying the investments were ‘technically held in Mrs E’s name is fair. The fact is they were held in Mrs E’s name, and the advice was paid with fees apparently taken from her investment(s). It is therefore clear to me that Mrs E was obtaining a service from WWM in the form of investment (ongoing) advice. So, while Mrs E’s husband might have been the primary contact with whom WWM delivered or communicated its advice in relation to the family’s portfolio, and I accept this situation is not uncommon, this does not mean Mrs E was not a customer of WWM under the ordinary meaning of the term. Mrs E had investments in her name, which WWM was providing information about and providing ongoing advice in relation to as the available evidence shows. So, I think Mrs E was obtaining a service (ongoing advice) from WWM. And it is this service she obtained from WWM, about which she is complaining.

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I therefore think Mrs E’s relationship with WWM was that of a customer under the ordinary meaning of the term and that her complaint arises from matters relevant to that relationship. I think the tests within the above rules have been met, so Mrs E is an eligible complainant under our rules. This means I can consider this complaint. Before I turn to the merits of the complaint, and for the avoidance of doubt, I agree with the investigator that it is appropriate this complaint is dealt with in the sole name of Mrs E. Mrs E and her co-borrower did not have an ongoing joint advice relationship with WWM to warrant this complaint being considered on a joint basis. Mrs E had investments in her sole name, which appears to have been subject to ongoing advice by WWM. So, I’m satisfied it is appropriate to consider this matter in Mrs E’s sole name. Ongoing advice duty to highlight risks of investment I think it is necessary to be clear here that we have already separately decided that WWM is not responsible for any advice that might have been given in relation to the investment by way of the loan Mrs E made to the Fund. And as part of that decision, we also decided that there was nothing to suggest WWM knew Mr X, who I referred to above, was carrying out regulated activities in relation to the Fund or that WWM knew Mr X was doing anything he shouldn’t have been doing under the agreement it had with him. I’m making this point here because Mrs E, through her representative, has repeated in this complaint and referred back to the submissions she made in her linked complaint about her views on the relationship between WWM and Mr X, including the impression given by WWM and Mr X about his role with WWM, and what she describes as the close connection between the Fund and WWM because of both Mr X’s and WWM’s conduct. But these matters have already been addressed and decided as part of the separate linked complaint. So, I’m not going to revisit these points here. The matter for me to address here is whether, as Mrs E has argued, WWM and the regulated adviser Mrs E was dealing with (albeit via her husband) was under any kind of duty or obligation to highlight the risks involved in her investment in the Fund as part of its ongoing advice relationship and service. And for the following reasons, I don’t think it did. I can see that Mrs E feels we have reframed this complaint, suggesting its focus has been limited to what took place in review meetings. Because WWM was not responsible for any advice given to invest, I’ve considered this complaint in the context of any ongoing advice service duty WWM had with Mrs E, which included any regular reviews. And I’m satisfied this is the basis on which this complaint should be considered. The first thing to note here is that I have not seen anything documented by WWM to demonstrate that it was aware Mrs E had invested money in connection with the Fund via a mezzanine loan. The loan was made around March 2017, but the available fact-find WWM completed after this in around mid-2017, doesn’t make any reference to it. So, it’s possible WWM wasn’t made aware of it by Mrs E, or via her husband as the person it dealt with. But on the assumption that WWM did know of its existence, I’m not persuaded there was an ongoing duty to highlight the risks of this investment to Mrs E. I’m mindful here too of the particular nature of the investment made in this case – this was a commercial arrangement entered into and WWM would not have been permitted to advise on this in any event. WWM did not establish a formal client / fee agreement with Mrs E as I’ve said. It seems it didn’t feel it was necessary given her husband was the person it was dealing with in relation to the wider family assets and with whom it had a retained client and ongoing advice

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agreement with. Perhaps it should have put something in place with Mrs E. With no agreement, there is nothing setting out the scope of any ongoing advice and service it would provide to her. But formal agreement or otherwise, I don’t think simply knowing about an existing investment, including the loan-based investment in the Fund, means WWM was under a duty in this case to advise on this investment or highlight the risks in the way she describes. It seems from the ongoing advice that was provided to Mrs E, via her husband, was limited in nature and in relation to her investment ISA only. It appears based on what WWM has said that this is from where any relevant ongoing advice fees were taken. So, it seems to me that the understanding and the context for the ongoing advice here, absent a formal agreement, was limited to and focused on Mrs E’s platform-based investment ISA and her and/or her husband’s objectives in connection with this. This is what Mrs E paid for. I think the fees taken are relevant here because WWM says it took no fees in relation to the Fund investment. So, as it wasn’t being paid to provide ongoing advice on the investment in the Fund (notwithstanding WWM couldn’t advise on this type of unregulated investment arrangement in any event) I don’t think it was under an obligation to provide advice on or highlight the risks to Mrs E. And I don’t think Mrs E ought reasonably to have expected it, therefore. I also haven’t seen any evidence to show that Mrs E asked WWM and the regulated adviser for advice on her investment in the Fund. The nature of the relationship set up here means that Mrs E had no real direct contact with WWM. WWM was dealing with her husband who did have a client agreement in place and was also an investor in the Fund. As I’ve said, and based on my experience, this arrangement in dealing with things isn’t uncommon. This does mean, in my view, Mrs E’s husband’s relationship with WWM and its ongoing duties and obligations to him is of relevance here. But I’ve already separately decided WWM was under no obligation to advise him on or highlight the risks associated with the Fund based on its ongoing advice service duty and the scope of the agreement in place. Nor under its general duty based on his financial circumstances and the type of client / nature of the relationship he had with WWM. And because it was understood by both parties, which of the family investments / objectives WWM was entrusted to advise on, which did not include the Fund. So, whether to Mrs E directly, or via her husband given how the relationship was practically conducted, I do not think WWM had an obligation to highlight the risks of her investment in the Fund in the way she’s described. I’d add that, even if I thought WWM ought to have highlighted or drawn Mrs E’s attention to the high-risk nature of the investment she had undertaken and questioned its suitability for her (which for the avoidance of doubt I do not), given the nature of her investment by way of a commercial loan, it’s not clear to me what remedial or preventative action she could have taken in any event to have avoided the losses that followed. It seems unlikely to me that Mrs E could have cancelled the loan or demanded its immediate repayment for example. So, I’m not persuaded Mrs E’s position would have been any different – it seems, more likely than not, she would still have suffered a loss in any event. So, in conclusion, while Mrs E is no doubt troubled by the losses she’s incurred, for the reasons above, it is my view that her losses were not the result of WWM’s failure to act fairly or reasonably towards her as part of its ongoing advice duty and service commitment. It follows that I do not intend to uphold this complaint. Responses to my provisional decision

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WWM did not respond to my provisional decision. Mrs E, via her representative, responded. She said she was pleased I’d decided she was an eligible complainant. And as that had been decided, she said she maintained the position previously set out in her earlier submissions – that is, WWM breached its duty in failing to alert her to the risks of the mezzanine loan and that comprehensive advice was not needed, simply an indication the loan was high risk. She also repeated the point that the complaint was about WWM’s failure to advise not to invest, or disinvest – it was not limited to a failure to advise after the investment had been made, referring to the point I made that it was unlikely Mrs E could have taken any remedial action in any event. She also provided copies of two emails from her husband to Mr X. Both refer to the mezzanine loan, which she regarded as being relevant and further evidence of the advice relationship between her husband and WWM, siting the point I made about her husband’s relationship with WWM, and its ongoing duty and obligation to him, being of relevance in her case. She asked whether this evidence changes the conclusions I’d reached. 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, and considered the response to my provisional decision, I’ve not been persuaded to change my mind. I’ve reached the same conclusions and for the same reasons as I set out in my provisional decision. Mrs E has broadly repeated the points made in earlier submissions, which I’ve already considered in reaching my provisional decision. In my view, I provided sufficient reasoning to support my conclusions covering the relevant points raised. My reasoning and conclusions set out in my provisional decision are included here and form part of my final decision as I explained above. So, I don’t feel it is necessary to set this all out again – my reasons and conclusions remain the same. As to the two emails Mrs E has provided. The emails relate to exchanges between Mrs E’s husband and Mr X in 2019 and 2015 and make reference to the mezzanine loan. I need to be careful here. If, as it appears, Mrs E is using these to again support her views on the alleged advice relationship between WWM and Mr X, and what she’s described as the close connection between the Fund and WWM because of both parties conduct, as I said in my provisional decision, this relates back to Mrs E’s separate linked complaint. And an Ombudsman has already addressed and decided the matter of Mr X’s relationship with WWM as part of that complaint. So, it isn’t appropriate for me to revisit this here. But if, on the other hand, Mrs E is referring to these emails as being relevant to the broader point where I said in my provisional decision that her husband’s relationship with WWM and its ongoing duties and obligations to him is of relevance here, as I also went on to say, I’ve already separately decided WWM was under no obligation to advise him on or highlight the risks associated with the Fund – whether based on its ongoing advice service duty and the scope of the agreement in place, or under its general duty based on his financial circumstances and the type of client, and nature of the relationship he had with WWM.

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So, I remain of the view that, whether to Mrs E directly, or via her husband given how I accept the relationship was practically conducted, I think WWM was under no obligation to highlight the risks of Mrs E’s investment in the Fund in the way she describes. So, it follows that, I’m not persuaded Mrs E’s losses were the result of any failure of wrongdoing on the part of WWM. My final decision For the reasons above, I’ve decided to not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs E to accept or reject my decision before 13 May 2026. Paul Featherstone Ombudsman

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