Not upheld: unsuitable investment advice; alleged failure to safeguard vulnerable customer complaint against Skipton Building Society

Decision detail

Summary

Mrs M, aged 83, complained that Skipton Building Society provided unsuitable investment advice when it recommended she invest £75,000 in a General Investment Account using a passive multi-asset fund, claiming excessive risk exposure, inappropriate long-term timeframe, and inadequate disclosure of charges. She also questioned whether the adviser should have proceeded given her alleged vulnerability. Skipton assessed Mrs M as having a Level 5 (medium-to-higher) attitude to risk based on a questionnaire and detailed discussion, noting she had £300,000 in cash reserves, good health, comfortable finances, and wanted to invest for her children's long-term benefit. The ombudsman found the advice suitable given Mrs M's objectives, financial circumstances, investment experience, and properly assessed risk profile, and noted that even if unsuitable, Mrs M had not suffered financial loss as her investment outperformed the benchmark by approximately £2,400.

The Ombudsman's reasoning

The ombudsman found that age alone is not a barrier to investing and that Mrs M's objective of investing for her children's long-term benefit was reasonable and aligned with her circumstances. The risk assessment was properly conducted through a questionnaire followed by detailed discussion, and Mrs M's apparent preference for bank deposits was explored as part of a comprehensive discussion rather than being treated as a definitive answer. Mrs M had sufficient cash reserves (£300,000) to cover emergencies and future needs while committing £75,000 to longer-term investment. The fund choice was appropriate as a multi-asset passive fund providing diversification. The adviser properly offered Mrs M the opportunity to have support present, which she declined, and there was no evidence she was incapable of understanding the advice at the time. The follow-up call demonstrated Mrs M's clear memory and understanding of the meeting.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website