Earlier this year my wife signed up with a financial services provider. They keenly sold her a product when they found out the total sum that she was going to invest.

Fast forward a few months, it turned out they didn’t do their due diligence on her file so this lead to some compliance enquiries by their custodian (this is what they stated but no evidence was provided to her). She offered to assist with this request but they became extremely unresponsive. No timeline was mentioned for when this compliance had to be satisfied whatsoever. She requested to visit their office in London to get to the bottom of it but they played tricks to avoid that. She escalated the matter to the head of the company who called her and confessed that his staff’s behaviour was irresponsible and that he had ordered an investigation. He offered her a discount on fees straight away and said that the subject Relationship Manager was reprimanded (he didn’t say how exactly as it was an “internal HR issue”). Good thing he followed up on everything that was discussed in writing so we have a record.

My wife has now satisfied the compliance queries and the firm has confirmed this. However, they have just informed her that they cannot offer her their services anymore due to her tax residency status (her tax residency has not changed from “nontax resident” since she became their client so we have no idea what they are talking about). Following this she tried to get hold of this top person again and requested a phone call but he just re-directed her to a junior employee. We are not sure why is he trying to avoid her now because when he offered her the discount it was on the assumption that they wanted to keep her as a customer right? So has he also just realised that he misunderstood her situation or has something happened internally following their “investigation” and/or with their custodian and they think they are exposed so they are now using this as an excuse to get rid of her?
The change in his tone is causing suspicions and clearly they are playing a game but we have no idea what is it.

Of course any business has the right to stop offering you services but in the UK financial services industry, are they required by law to provide a reason (because if the reason really is her nontax residency then why did they accept her business in the first place)?

We haven’t withdrawn the funds yet and we are thinking to take legal action or inform the regulators based on the grounds of mis-selling, non-responsiveness, and loss of opportunities had she invested my money elsewhere (she has lost most of the gains already that they made on her investments during the year). But before we do that, please can someone tell me if withdrawing funds will affect her case in any way?

Any suggestions to protect ourselves would be highly appreciated.

My advice - Seek professional advice not forum advice for something as complex as this or contact FCA in the UK.

It's hard to say exactly what the issue is but many UK regulated firms don't offer certain types of advice to expats - but whatever the case a UK firm should be under the FCA so your first port of call should be with them, especially if you've lost out on other opportunities with their untimely delays and opaque service.

As others would say, don't rely on forum advice for these sorts of things. I state that as an investment advisor myself - get professional advice from UK professionals and open communications with the FCA as well.