Abel had a share portfolio which was looked after by an investment adviser. Abel’s dividends were always reinvested by the adviser, so that he continued to accumulate shares. At the beginning of 2021, Abel noticed the dividends were sitting in his cash account and hadn’t been reinvested since 2018.
Abel complained to the adviser about the issue but didn’t get a response, so he came to FSCL for help.
Abel complained the adviser had stopped reinvesting his dividends without his instruction. Abel wanted the adviser to compensate him for the lost opportunity to gain more shares. Abel also thought his portfolio management fees should be reimbursed from 2018 given the adviser hadn’t effectively managed his portfolio.
The adviser said in 2018 they notified Abel that they would no longer be automatically reinvesting clients’ dividends. However, in good faith, the adviser offered to compensate Abel $4,500 for the lost opportunity to accumulate more shares and as reimbursement for the portfolio management fees paid from 2018.
Abel accepted the adviser’s settlement offer and we closed the complaint.
Insights for participants
This complaint appeared to have slipped through the advisers’ internal complaints process, because the adviser was keen to resolve it immediately after we contacted the adviser about the complaint. When we receive a complaint from a consumer that hasn’t been resolved after 40 working days, our terms of reference allow us to open an investigation straight away.
There is often a cost benefit to resolving complaints early on, even where a participant isn’t necessarily in the wrong.