Artemis Fund Managers Limited · DRN-6211350

The complaint Mr B complains that Artemis Fund Managers Limited (‘Artemis’) failed to notify him when the servicing agent linked to his stocks and shares ISA was updated, or make him aware of more cost-effective investment options. What happened Mr B received advice from an independent financial adviser I’ll call Mr L. In 2002, he was advised to set up a stocks and shares ISA with Artemis and invest in a managed fund. Mr L was added to the account as servicing agent. In 2005, following Mr L’s retirement, a firm I’ll refer to as C1 replaced Mr L as servicing agent on Mr B’s ISA. Then, in 2008, C1 was replaced by a firm I’ll call C2. C2 was eventually removed from Mr B’s account following a bulk exercise carried out by Artemis in 2021. Mr B says these changes took place without his knowledge. Mr B made regular payments into his ISA, which generated commission that was passed to the servicing agent. Mr B is unhappy that commission has been paid to servicing agents unknown to him, for which he has received no service. Given the length of time that’s passed since his original adviser retired, Mr B is concerned he’s remained invested in a unit class that may no longer be the most appropriate or cost effective option for his circumstances. He’s unhappy that Artemis failed to proactively contact him to facilitate a fund review and raised a complaint on that basis. Mr B raised further concerns after discovering that C1 ceased to be authorised in 2009. He felt Artemis had unreasonably enabled an unauthorised firm to remain listed as service agent and receive ongoing commission payments despite providing no service to him. In response to Mr B’s complaint, Artemis acknowledged its customer service could have been better as it incorrectly indicated to Mr B that C2 was the only servicing agent that had been listed on his account, but did not uphold Mr B’s remaining concerns. It said: • It correctly updated the servicing agent to C1 after receiving notice it had taken over servicing agent responsibilities from Mr L in 2005. • C2 was incorporated in December 2008 and took over C1’s role as servicing agent on Mr B’s account prior to C1 becoming de-authorised. • A cheaper unit class was not available to Mr B until Artemis created a new class in 2020, which it arranged to convert Mr B’s holdings to in April 2021 following a bulk exercise. C2 was removed from Mr B’s account during this process. • Artemis was not authorised to provide advice on the suitability of its products, but Mr B could view information about alternative funds it offered on its website and provided the relevant contact details should Mr B decide to request a fund switch. • It runs a weekly report to verify the authorisation status of servicing agents linked to client accounts and has a process to remove agents that are no longer authorised

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and notify both the client and agent. Unsatisfied with Artemis’ response, Mr B referred his complaint to our service. In addition to points noted above, he said the following: • He questioned why an unauthorised servicing agent could remain on his account between 2005 and 2021 and what happened to the commission payments during this period. • He queried why was there a delay between the release of the cheaper unit class in March 2020 and his switch into it in April 2021. One of our investigators reviewed Mr B’s complaint and was of the view that Artemis didn’t need to take any action. In summary, they said: • Prior to Artemis launching a new unit class in 2020, Mr B was in the cheapest class available to him for the fund his ISA was invested in. • After the new unit class was launched in 2020, Artemis carried out a bulk exercise, which resulted in Mr B’s investment being converted to it in April 2021. While it took over a year for the conversion to complete, they didn’t think Artemis had acted unfairly or caused unreasonable delays during the process. • Prior to C2 being removed from the account in 2021, there was no evidence of an unauthorised firm being recorded as Mr B’s servicing agent. • Any commission payments would have been passed to the relevant servicing agent linked to the account prior to C2’s removal in 2021. • It was their view that while Artemis was unable to provide copies of letters it sent to Mr B to notify him of changes to the servicing agents on his account, it was more likely than not that Artemis provided notice to Mr B using the contact details it had available. Mr B disagreed with our investigator’s opinion and provided further submissions, which in summary said: • The investigator had misunderstood his concerns. • Artemis’ failure to notify him of the changes to servicing agents caused Mr B to miss opportunities to move his investment to an alternative fund or to another provider. • He maintains meticulous records and is certain he received no communication from Artemis.

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Artemis replied to confirm it accepted the investigator’s view, but provided further submissions stating: • When it spoke to Mr B in response to his initial complaint, he appeared familiar with the updated servicing agent’s name. • During a phone call, Mr B said he had received paperwork in 2021 explaining the servicing agent had been removed and that his account would move to the new unit class. As matters remain unresolved, 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. Where the evidence is incomplete or inconclusive, I’ve reached my conclusions on the balance of probabilities – that is, what I think is more likely than not to have happened based on the available evidence. I’m broadly in agreement with the conclusion reached by our investigator. I’ll explain why. Time limits There are time limits that apply to certain complaints this service can consider. However, in this case, Artemis has confirmed it provides consent for us to consider Mr B’s complaint regardless of any time limits that would ordinarily apply. With that in mind, I’ll turn my attention to the merits of Mr B’s complaint. Lack of notice servicing agents changed I understand Mr B had concerns that an unauthorised agent had been listed on his account for many years. Having reviewed the available evidence, I’m satisfied that the servicing agents connected to his account were authorised at all relevant times. C1 was replaced by C2 on the account prior to C1 becoming de-authorised in 2009. Artemis has confirmed it has a process in place to run regular checks to ensure only authorised firms are listed as service agents for its customers’ accounts. Should any active agents become de-authorised, Artemis said it would take action for those agents to be removed from impacted accounts. I’ve also considered Mr B’s concern that he wasn’t kept updated when the servicing agents changed on his plan. He also believes Artemis ought to have contacted him at the time Mr L retired to facilitate a fund switch to a more appropriate or cost-effective option. Artemis told us it has a standard approach in place to write to clients to update them of any changes, but due to a systems upgrade, it no longer holds copies of past communications and so cannot provide any evidence to confirm that Mr B was duly notified. Artemis has confirmed it held up to date address records for Mr B at the relevant times, but Mr B has also explained he keeps meticulous records and has no evidence of being contacted. While it’s unfortunate Artemis does not hold historical communication records to evidence any letters that may have been issued to Mr B, it’s my view that it was the responsibility of the servicing agents to keep Mr B updated of these changes, rather than Artemis.

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That said, I’ve seen a copy of an account statement Artemis issued in 2006, which named C1 rather than Mr L as the servicing agent. It’s therefore likely that other regular statements also listed the name of the servicing agent connected to the account. Mr B has confirmed he did receive statements from Artemis, so I’m satisfied that Mr B ought to have had some awareness from reviewing his statements that the servicing agent had been updated. This is something Mr B could have challenged at an earlier time if he felt he wasn’t receiving a service from the relevant firm. I’d also like to take this opportunity to clarify that it appears the ongoing fee arrangement in place for the servicing agents was commission, which is different to fees for ongoing advice services. I’ve not seen anything to indicate Mr B was paying ongoing fees in respect of advice that he ought to have been receiving from the servicing agents connected to his plan. In any case, Artemis is not responsible for any failures on the part of the servicing agents to provide a service to Mr B. At the time the policy was arranged, it was typical for advisers to receive payment for their work via commission paid by the policy provider, rather than the policyholder paying a separate fee for the advice. It was common for commission to be structured as an initial payment upon commencement of the policy, followed by regular ongoing commission. In this case, as the servicing agents changed, the ongoing commission payments were passed on to them. This was a standard practice at the time and should have been explained to Mr B by his original adviser. I’m unable to make a finding that Artemis did anything wrong in having this type of commission arrangement in place on Mr B’s account. It should also be noted that Artemis has explained the ongoing commission payments were not taken from Mr B’s account directly, but were paid by Artemis. I’ve reviewed a copy of a statement which, I’m satisfied, demonstrates this is correct. With that in mind, I’m satisfied Mr B has not been financially disadvantaged as a result of the commission payments paid to the servicing agents listed on his plan. I understand Mr B believes Artemis ought to have contacted him to facilitate a fund switch at the time Mr L retired and unable to offer further advice. This is because Mr B says he has not received ongoing advice services from the replacement servicing agents and so the fund he originally invested in may no longer be appropriate for his circumstances. Mr B has explained that following the initial advice to set up his ISA in 2002, he only recalls receiving additional advice from Mr L following the birth of his first child the following year. So having not heard anything from his adviser in the years that followed, I think Mr B ought to have understood his investments were not being actively reviewed. There was nothing preventing Mr B from contacting Artemis in the meantime to discuss the possibility of switching funds if that was something he wanted to consider. But there was no requirement for Artemis to proactively contact him to offer this. Artemis is not able to provide advice, and so I wouldn’t have expected it to proactively assess whether the investment remained appropriate for Mr B, or make a suggestion for Mr B to consider a fund switch at the time his servicing agent was updated, or any other time. I’m not able to agree that Mr B has been unfairly prevented from managing his investment account due to any act or omission by Artemis. However, Artemis has explained Mr B was in the cheapest available unit class for the fund he was invested in until it launched its new class in 2020. Artemis carried out an exercise which ultimately resulted in Mr B being moved into it.

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The time taken for Artemis to convert Mr B’s unit class I’ve also considered whether Artemis took an unreasonable amount of time to move Mr B’s investment to the new unit class. I understand Artemis launched its new unit class in March 2020, with the aim of simplifying the fee structure, including the removal of commission payments to servicing agents, enabling it to charge a lower annual management fee. Artemis decided to carry out an exercise to move all relevant customers over to the new unit class where appropriate. In order to determine which customers should be moved across, it contacted the servicing agents linked to plans to establish if they were actively providing services for their customers meaning they should remain linked to the account. In Mr B’s case, Artemis received no reply from C2, so it determined C2 should be removed from the account and his investment moved onto the new, cheaper unit class. Artemis has provided a copy of a letter template dated February 2021, which explained the plan to remove the servicing agent and convert the account to the new unit class following a notice period of 60 days. The letter invited customers to get in touch if they wanted their account to be moved over to the new unit class more quickly. Because Mr B did not respond, Artemis included his account in a bulk conversion once the notice period elapsed, which was completed in April 2021. Artemis said that because this was a bulk mailing exercise, it hasn’t got a record of the letter that was sent to Mr B at this time to notify him of the switch, but it was able to provide a record to indicate that because it received no response from C2, this would have triggered the letter mentioned above to be issued to Mr B. I understand Mr B disputes receiving any contact. Mr B told us that his address changed in October 2020. Artemis said it received notice of the address change in early February 2021, shortly before customers impacted by the proposed conversion were contacted. While Artemis has not been able to provide a copy of the actual letter it says it sent to Mr B, based on the information it has provided, I think it’s more likely than not that it included Mr B in the bulk mailing exercise to communicate the notice to Mr B that his account would be converted. I’m not satisfied any lost opportunity for the conversion to have taken place slightly sooner was a result of Artemis acting unreasonably. However, I note Artemis said Mr B indicated he had received a copy of this notice when he initially discussed his complaint with it in May 2025. While it took approximately one year for the switch to be completed, Artemis has explained the action it took to convert Mr B’s unit class was part of a project impacting many customers, which took time to complete. The project required a review of all accounts to identify those which may benefit from being converted. This was followed by various steps, including time spent attempting to seek confirmation from active servicing agents to check if they should remain on accounts. I appreciate why Mr B feels concerned about the timescale, but this was a proactive exercise carried out by Artemis with a view to providing a better service for its customers, which it wasn’t under a regulatory obligation to carry out within a specified timescale. A project such as this involving many customers will inevitably take time to complete. Ultimately, I think Artemis has acted reasonably in taking proactive steps to create a new fund with a simpler charging structure to provide customers with a more cost-effective fund. I’m not satisfied that Mr B has been unfairly disadvantaged by Artemis’ actions, or that Artemis caused an unreasonable delay in carrying out its conversion exercise. Further,

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carrying out the conversion exercise wasn’t something Artemis was required to do, and so, there’s no scope for me to make a finding that it ought to have done this at an earlier time. Finally, I note Mr B has made reference to another provider settling a similar complaint. I’m unable to comment on the actions of another provider, or any decision it may have made to settle a complaint. The fact that a different provider has chosen to make an offer to settle a complaint does not automatically indicate that Artemis did anything substantially wrong. Having carefully considered the circumstances of this complaint, I’m not persuaded that Artemis has acted unreasonably and I make no direction for it to take any action. My final decision My final decision is that I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 25 May 2026. Rebecca Faiers Ombudsman

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