The Financial Ombudsman Service (FOS) has ordered Towry to repay the trail commission it received on two clients’ investments during transfer delays lasting up to 14 months.
Both are clients of Barry Bennett, former adviser at Edward Jones, who moved to Raymond James after Towry’s acquisition of EJ in October 2009. He is one of the advisers who recently successfully defended the High Court case brought by Towry against RJ and seven advisers.
After the acquisition, there were widespread delays to Towry’s transfer process.
In April 2010, a client requested Towry transfer his £35,000 ISA to Raymond James. In August 2010, the client complained to the FOS that Towry had not completed the transfer. He later complained he had suffered a financial loss because RJ rebates trail to the client but Towry retains it.
In May 2011, an ombudsman ordered Towry to pay the client the trail he would have received from RJ if the investment had been transferred in May 2010. This amounted to £300, based on a 0.85% commission rate, plus £400 compensation for distress and inconvenience.
Towry completed the transfer in June 2011, 14 months after the initial request was filed.
Another of Bennett’s clients requested Towry transfer his £52,100 ISA and deal account to Raymond James in April 2010. Towry did not complete the transfer until April 2011.
The client complained to the FOS about the delay in September 2011 and in November, the FOS ruled Towry must repay the client £387.65 in trail based on the same commission rate, plus £300 compensation.
A Towry spokeswoman says: “We are sorry these clients experienced delays.” She declined to comment on whether Towry has been ordered to repay trail to other clients.