Partially upheld: General financial advice complaint against Curtis Banks Limited
Financial Ombudsman decision DRN-5134144 of 2024-12-13T00:00:00+00:00. General financial advice complaint against Curtis Banks Limited. Outcome: Partially upheld.
Decision detail
| Reference | DRN-5134144 |
|---|---|
| Decision date | 2024-12-13T00:00:00+00:00 |
| Firm | Curtis Banks Limited |
| Product | Pension |
| Claim type | General financial advice |
| Outcome | Partially upheld |
| Remedy | Curtis Banks must: (1) Obtain current valuation of the 50% property share purchased from Mr X; (2) Calculate actual value as current property valuation plus net rental income received plus investment returns on rental income; (3) Calculate fair value as what £287,500 would have been worth invested in FTSE UK Private Investors Income Total Return Index from 18 January 2023 to final decision date; (4) If fair value exceeds actual value, pay the difference to Mr S reduced by 20% notional tax allowance; (5) Pay 8% simple interest per year from final decision date if not settled within 60 days; (6) Pay £500 for distress and inconvenience caused; (7) Pay £200 already offered for D anti-money laundering inconvenience if not already paid. Valuation costs to be borne by Curtis Banks. |
Summary
Mr S complained about Curtis Banks' administration of his SIPP regarding the purchase of a commercial property. Curtis Banks required revised Land Registry compliant plans due to boundary concerns, which the ombudsman found reasonable. However, Curtis Banks failed to demand a revised property valuation before Mr X's 50% share was purchased on 18 January 2023, despite knowing in December 2022 that the March 2022 valuation of £575,000 was outdated and likely overstated. The property was subsequently valued at £490,000 in March 2023, representing an £85,000 decrease. The ombudsman partially upheld the complaint, finding Curtis Banks breached its duty to act in Mr S's best interests but could not calculate a specific financial loss because Mr X's willingness to accept a lower price was unknowable. Compensation was ordered calculated as if the purchase had not occurred, with the purchase funds compared to what they would have been worth if invested in equities instead, reduced by 20% notional tax. Curtis Banks was also ordered to pay £500 for distress and inconvenience and £200 previously offered for D account issues.
The Ombudsman's reasoning
Curtis Banks breached its duty to act in Mr S's best interests by failing to demand a revised valuation before Mr X's share was purchased on 18 January 2023, despite knowing in December 2022 that the valuation was outdated and likely overstated. The ombudsman found Curtis Banks acted reasonably in requiring revised plans based on solicitor advice, reasonably delayed funds transfer given the transaction complexity, and reasonably required account reconciliation. However, the failure to obtain a revised valuation before the first purchase was the critical error. The ombudsman could not calculate a specific financial loss because it is impossible to determine whether Mr X would have accepted a lower purchase price of £490,000 versus the agreed £575,000. Therefore, fair compensation is calculated as if the purchase had not occurred at all, comparing the actual value of the property now held with what £287,500 would have been worth if invested in equities instead.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Curtis Banks Limited, all decisions | 54 | 50% |
| General financial advice, all decisions | 4,578 | 36% |
| Pension, all decisions | 15,579 | 47% |
Source
Read the original decision on the Financial Ombudsman Service website