Not upheld: unsuitable advice / failure to recommend trust structure for life insurance policy complaint against FIRST 4 MORTGAGES LIMITED

Decision detail

Summary

Mrs G and the estate of Mr S complained that F4ML failed to advise placing Mr S's term assurance policy into a trust, which would have moved it outside his estate and protected it from a claim by his estranged wife following his death in 2024. Mrs G had disclosed Mr S's marital status to an individual named R, but R was not an F4ML employee and the information was not passed to F4ML's adviser. The fact find completed by F4ML recorded Mr S as 'living with partner' with no children. The ombudsman found that F4ML's adviser was not made sufficiently aware of Mr S's circumstances and therefore acted reasonably in not recommending a trust structure, and that Mrs G and Mr S had a reasonable opportunity to ensure the adviser was fully informed during the fact find process. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that F4ML's adviser was not made sufficiently aware during the fact find process that Mr S was married or had children from a previous relationship. While the ombudsman acknowledged that had this information been provided, it would likely have prompted a discussion about placing Mr S's policy in trust, the adviser acted reasonably in recommending a specific course of action based on the information actually provided. The ombudsman rejected the argument that the adviser should have proactively recommended placing the policy in trust without awareness of circumstances indicating a third party might claim against Mr S's estate. The ombudsman found that Mrs G and Mr S had a reasonable opportunity to ensure the adviser was fully informed of their circumstances, and that Mrs G should have ensured relevant details were provided during the fact find process rather than assuming R had shared information with F4ML's adviser.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website