Turns out certain characters cause problems in the connections.config file if you use special characters for the password.
Specifically & < > “ ‘ $ £ etc
Because they mess up the syntax of the web.config file they cause the wService test database page to report an error in the application rather than simply stating connection failed – so inadvertently makes you think the server is incorrectly configured rather than it actually being a password issue! The RMS test database page loads normally and reports SQL connection failed.
https://forums.asp.net/t/1924820.aspx?Special+characters+in+connection+string
