Not upheld: suitability of advice, inheritance tax miscalculation, fee structure complexity, service delivery shortfall complaint against Heritage Financial Services (IW) Limited trading as Heritage Financial Services

Decision detail

Summary

Mrs B, aged 78 and widowed, received financial advice from Heritage in 2014 to consolidate her investments and place an Offshore Investment Bond into a Discounted Gift Trust for inheritance tax planning. She complained in 2024 about three main issues: excessive and duplicative fees, failure to conduct promised annual reviews, and unsuitable advice to establish the DGT based on an incorrectly calculated inheritance tax liability of £70,000 (correct figure was £4,000). The ombudsman found that while Heritage made a significant error in the inheritance tax calculation, the DGT advice remained suitable given Mrs B's stated objectives, her strong financial position with accessible reserves, and the product's characteristics. Annual reviews were conducted in line with FCA requirements from 2018 onwards. Fees were not duplicative and Mrs B had actually benefited from fixed monthly charges. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while Heritage made a significant error in calculating Mrs B's inheritance tax liability, this error did not render the DGT advice unsuitable given her stated objectives and personal circumstances. The DGT aligned with her needs for income while reducing inheritance tax exposure and maintaining access to other funds. Mrs B had sufficient accessible funds and emergency reserves, showed no evidence of financial detriment, and made no withdrawals suggesting she needed additional liquidity. The fees charged were clearly documented and not duplicative; Mrs B benefited from fixed monthly charges rather than variable percentage-based charges. Annual reviews were conducted in line with FCA requirements from 2018 onwards, with the earlier period falling outside the jurisdiction of the service. Mrs B was not found to be vulnerable and demonstrated good understanding of her investments throughout.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website