Not upheld: unsuitable investment advice; failure to conduct annual reviews; poor service regarding online portal access complaint against Quilter Financial Planning Solutions Limited

Decision detail

Summary

Mrs G, a 66-year-old retired widow with no investment experience, sought advice on investing £250,000 from a house sale for the benefit of her son Mr G2, who had mental health issues and unreliable income. After initially completing an ATR questionnaire showing conservative risk tolerance, Mrs G requested a more balanced approach in June 2021 after discussing with Mr G1. Quilter advised her to invest in an Offshore Investment Bond holding a balanced risk ESG-focused fund held in trust. The fund declined significantly in value by December 2022, and Mrs G complained that the advice was unsuitable, she received no annual reviews, and she was treated as a vulnerable client without appropriate protections. The ombudsman found the advice suitable given Mrs G's explicit request for higher risk, her strong financial position with adequate emergency funds, and her long-term investment objective for her son's benefit, and found no evidence of vulnerability at the time of advice.

The Ombudsman's reasoning

The ombudsman found the advice suitable because: (1) the balanced risk fund was appropriate given Mrs G's objective to generate growth and income for her son over the long term; (2) Mrs G herself requested the higher risk rating after discussing with Mr G1 who had investment experience; (3) Mrs G had sufficient financial capacity for loss with £115,000 remaining in cash plus pension income after the investment; (4) the trust structure was suitable for retaining control and protecting the vulnerable beneficiary; (5) the medium to long-term timescale aligned with her stated objectives and confirmed she would not need the capital; (6) the fund composition of 76% stocks and bonds represented a balanced rather than aggressive risk level. The ombudsman rejected the claim that annual reviews should have occurred as the adviser had waived fees after the fund declined, making it reasonable not to provide a paid service. The ombudsman found no evidence Mrs G was vulnerable at the time of advice, noting only Mr G2's vulnerability was documented.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website