Partially upheld: failure to communicate clearly; inadequate customer service regarding trust arrangement complaint against Legal and General Assurance Society Limited

Decision detail

Summary

Mr J complained that L&G failed to ensure his life insurance policy trust was properly structured when set up in 2014. In 2025, Mr J discovered that as sole trustee, the trust lacked the safeguards needed to guarantee policy benefits would reach his intended beneficiary if he died. The ombudsman found L&G was not acting in an advisory capacity and had provided sufficient information at setup, but upheld the complaint because L&G gave Mr J conflicting and inconsistent information when he made enquiries in 2025 about the trust's validity and operation. The ombudsman awarded £100 compensation for the customer service failings but rejected Mr J's requests for premium refunds or policy extension.

The Ombudsman's reasoning

The ombudsman found that L&G was not acting in an advisory capacity and therefore had no obligation to ensure the trust was appropriately structured or to proactively intervene by recommending an additional trustee be appointed. The trust documentation contained sufficiently clear information flagging the consideration of appointing additional trustees and recommending Mr J seek advice. However, L&G failed to meet its regulatory obligation to communicate clearly and consistently when Mr J made enquiries in 2025, providing contradictory information about trustee requirements and the fate of policy proceeds, which exacerbated Mr J's confusion and distress.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website