Not upheld: Investment mis-selling complaint against The Ancient Order of Foresters Friendly Society Limited

Decision detail

Summary

Mr and Mrs B complained about market value reductions (MVRs) applied to their with-profits investment policies with Foresters from November 2022. They argued that Foresters should have provided advance notice of the MVR with a withdrawal window allowing them to exit without penalty, and should have made an exception when they called shortly after the MVR was applied. The ombudsman found that Foresters had properly disclosed the possibility of an MVR in the original policy documentation and was not obliged to provide advance notice or a withdrawal window, as doing so would be counter to the purpose of the MVR in protecting the fund during market downturns. The complaint was not upheld and no remedy was ordered.

The Ombudsman's reasoning

The ombudsman confirmed that Foresters met its obligations by disclosing the possibility of an MVR in the original policy documentation. While acknowledging that a specific notice of MVR application would have been helpful, the ombudsman found this did not constitute a failing as Mr and Mrs B discovered the MVR relatively quickly. The ombudsman rejected the argument that Foresters should have provided advance notice with a withdrawal window, reasoning that this would be counter to the purpose of the MVR (which is to protect the fund during downturns by discouraging withdrawals). The ombudsman also rejected the argument that Foresters should have made an exception due to the timing of the November 2022 telephone call, and found no evidence that the MVR was applied due to inadequate resources or to unfairly pass burden onto members.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website