Upheld: Unsuitable investment advice - risk profile mismatch complaint against King's Court Financial Planning LLP
Financial Ombudsman decision DRN-6118472 of 2026-05-08T00:00:00+00:00. Unsuitable investment advice - risk profile mismatch complaint against King's Court Financial Planning LLP. Outcome: Upheld.
Decision detail
| Reference | DRN-6118472 |
|---|---|
| Decision date | 2026-05-08T00:00:00+00:00 |
| Firm | King's Court Financial Planning LLP |
| Product | Investment - Alternative Investment Market (AIM) ISA and General Investment Account (GIA) |
| Claim type | Unsuitable investment advice - risk profile mismatch |
| Outcome | Upheld |
| Remedy | KCFP must: (1) Compare the performance of the AIM ISA investment against a benchmark comprising 50% FTSE UK Private Investors Income Total Return Index and 50% average fixed-rate bond rates, and pay the difference between fair value and actual value if fair value is higher; (2) Pay 8% simple interest per year on any loss from the end date to settlement; (3) Pay £125 for trouble and inconvenience; (4) Provide calculation details in clear and simple format. The compensation limit applicable is £445,000. |
Summary
Mr R and his wife, both retired, received investment advice from KCFP in 2021 to invest approximately £192,800 in an AIM ISA and £170,000 in a GIA to address an annual income shortfall of over £20,000 and for IHT mitigation. Mr R had a balanced risk profile and small/medium capacity for loss, but KCFP recommended an AIM ISA with an adventurous risk profile (two levels above his profile). Although KCFP identified IHT mitigation as a benefit, this was an objective it suggested rather than one Mr R prioritised. The GIA was intended as an optional annual feeder and was never funded. Mr R liquidated the AIM ISA in November 2024 after realising the unsuitable risk exposure. The Ombudsman upheld the complaint, finding the AIM ISA recommendation significantly mismatched Mr R's risk profile and was not justified by the secondary IHT objective, as Mr R did not make an informed decision to accept the higher risks. KCFP was ordered to pay compensation based on a 50/50 benchmark of equities and fixed-rate bonds, plus £125 for distress and inconvenience.
The Ombudsman's reasoning
The Ombudsman found that KCFP's recommendation of the AIM ISA was unsuitable because it significantly mismatched Mr R's balanced risk profile (the AIM ISA was adventurous, two levels above his profile). Although KCFP identified IHT mitigation as a potential objective, this was not Mr R's priority and did not justify exposing him to significantly higher risks without his informed decision. The GIA was not an indispensable part of the solution but merely an optional annual feeder, so the AIM ISA's suitability could not depend on it. Mr R reasonably relied on KCFP's representation that the advice was suitable and in his best interest, but he was not made aware of the significant risk profile mismatch. The 10-year investment term did not convert an unsuitable adventurous investment into a suitable balanced one. Mr R did not make an informed decision to accept the higher risks, and KCFP improperly took that decision for him.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| King's Court Financial Planning LLP, all decisions | 2 | 100% |
Source
Read the original decision on the Financial Ombudsman Service website