Not upheld: incorrect product purchase on execution-only platform / alleged insufficient information disclosure complaint against Halifax Share Dealing Limited trading as Lloyds Bank Direct Investments

Decision detail

Summary

Mr D complained that he incorrectly purchased a bond instead of shares in Company A on his Lloyds stocks and shares ISA on 9 April 2025 because the platform was unclear about what he was selecting. When he selected the first option listed for Company A, he assumed it was for ordinary shares but it was actually for a bond. Mr D was presented with a Key Information Document (KID) describing the bond and confirmed he had read it before the transaction was completed. Lloyds refused to reverse the trade and offered £25 as a gesture of goodwill. The ombudsman found that Lloyds met its obligations as an execution-only service by providing the KID and obtaining Mr D's confirmation, and that the responsibility to ensure certainty about the investment vehicle lay with Mr D. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the principle that Lloyds' share dealing service is execution-only, meaning Lloyds has no obligation to advise on suitability but must provide information about selected transactions. The ombudsman found that Lloyds fulfilled this obligation by presenting the KID and obtaining Mr D's confirmation that he had read and understood it. The ombudsman acknowledged that while the platform could have been more explicit in its descriptions and provided cost warnings, it is not the ombudsman's role to interfere with a firm's processes, systems, or controls - that is the FCA's role. The fundamental responsibility to ensure certainty about the investment vehicle lay with Mr D as the customer on an execution-only service. The ombudsman noted that Mr D, as an experienced investor, would have been alerted to the bond nature if he had actually read the KID, and his confirmation that he had read it meant he was indicating awareness of what he was buying.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website