Wealth Management & DFM Failures Guide 2026 — Suitability, Concentration and Excessive Charges
The UK wealth management sector holds an estimated £1.3 trillion of retail assets under management. Large discretionary managers include St James's Place, Rathbones, Brewin Dolphin (RBC), Quilter, Investec Wealth, Charles Stanley, Brooks Macdonald and Killik & Co. Since the FCA's Assessing Suitability Review 1 (2016) and Review 2 (2021), the regulator has repeatedly identified poor suitability documentation across the sector. In 2023 the Consumer Duty (PRIN 12) imposed new obligations on all wealth managers to deliver 'good outcomes' — raising the bar for suitability, value for money and portfolio construction. This guide covers the current claim categories and how compensation is calculated.
The Six Recurring DFM Failures
1. Risk mis-match — cautious clients placed in balanced or growth portfolios. 2. Concentration — 20%+ of a portfolio in a single stock or sector, breaching diversification norms. 3. AIM / unlisted overweight — high illiquidity dressed up as IHT-mitigation without warnings. 4. Charge stacking — platform fee + DFM fee + fund charges + adviser fee producing total costs above 2.5% p.a. eroding real returns. 5. Portfolio churn — unnecessary transaction activity generating dealing commission. 6. Unsuitable structured products or in-house funds — DFMs recommending their own high-margin products rather than best-execution alternatives. Each of these is a documented FCA concern in the 2016 and 2021 Suitability Reviews and the 2023 Consumer Duty implementation guidance.
10 Signs Your Wealth Manager Failed You
- Your portfolio lost significantly more than the market fell during 2020, 2022 or 2025 drawdowns
- More than 15% of your portfolio sat in a single company at any point
- You are cautious or balanced but hold 60%+ equities without your explicit informed consent
- You hold significant AIM or unlisted assets without receiving specific illiquidity warnings
- Your total annual charges (all layers) exceed 2.5% and were never clearly disclosed
- The DFM recommended its own in-house funds without disclosing the conflict of interest
- Turnover in your portfolio exceeds 100% p.a. (churn)
- You were not told about tax charges triggered by discretionary rebalancing
- Suitability reviews are irregular, generic or missing
- Consumer Duty (PRIN 12) 'good outcomes' evidence is missing from your file
How to Claim Wealth Management Compensation
Every FCA-regulated wealth manager must issue a Final Response within 8 weeks. We draft the formal complaint identifying specific breaches of COBS 9.2 (suitability), COBS 11 (best execution), COBS 6.1A (adviser charging) and PRIN 12 (Consumer Duty).
Complaint escalation to FOS. Awards up to £455,000 for advice on or after 1 April 2019. Free and binding on the firm. Typical timeline 6–18 months.
For losses above £455,000 and against solvent large firms, we pursue direct claims for negligence and breach of contract. Successful reported cases include Barclays Wealth (O'Hare), Coutts (Zestos) and Rathbones (Various). Litigation-funded with success-fee options.
Where the firm has failed, FSCS pays up to £85,000 per claim. Recent DFM defaults include Beaufort Securities and SVS Securities.
Time Limits — The Rolling Section 14A Position
Wealth management claims benefit from a rolling section 14A position. Because unsuitable portfolios generate loss over years, the 'date of knowledge' can be the date of a specific performance disappointment, a change of adviser, an independent second opinion, or a Consumer Duty notification from 31 July 2023. The primary 6-year period runs from each specific act, but section 14A frequently keeps historic decisions in scope. The overall section 14B longstop is 15 years.