Not upheld: Investment mis-selling complaint against AJ Bell Securities Limited

Decision detail

Summary

Mrs D complained that AJ Bell mishandled a corporate action on her share dealing account, specifically a tender offer for Invesco Select UK Equity Trust shares. She alleged that delays in receiving the tender proceeds and unsuccessful shares prevented her from trading before a market halt and forced conversion, resulting in financial losses. AJ Bell relied on third-party providers (Firm P and CREST) to process the tender, and whilst delays occurred, the Ombudsman found these were not caused by AJ Bell's actions. The Ombudsman determined that AJ Bell exercised reasonable skill and care by promptly crediting available cash proceeds, repeatedly chasing third parties for updates, escalating CREST issues, and moving to manual settlement when necessary. The complaint was not upheld as AJ Bell could not be held responsible for third-party delays when they had acted appropriately and diligently.

The Ombudsman's reasoning

The Ombudsman found that whilst custodians have a duty to collect and transmit shareholder instructions accurately and on time, AJ Bell fulfilled this duty. The delays in Mrs D receiving shares and cash proceeds were not caused by AJ Bell's actions but by third-party providers and CREST system issues. AJ Bell exercised reasonable skill and care by: (1) securing and crediting cash entitlements promptly upon availability; (2) responding to Mrs D's questions in a timely manner; (3) consistently chasing Firm P for updates; (4) escalating when CREST issues arose; and (5) moving to manual settlement when automated transformation was unavailable. The Ombudsman concluded that no practical alternative would have secured earlier crediting of stock, and AJ Bell cannot be held responsible for third-party delays when they have acted appropriately and diligently.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website