Not upheld: Investment mis-selling complaint against Zurich Assurance Ltd (and predecessor)

Decision detail

Summary

Mr W, represented by a claims management company, complained that he was mis-sold a Maximum Investment Plan (MIP) by Zurich Assurance Ltd in 1994, arguing that a Personal Equity Plan (PEP) would have been more suitable and that the MIP's charges were excessive. Mr W was a 40-year-old experienced investor with a balanced-to-speculative risk profile, £45,000 salary, and existing shareholdings. The ombudsman found the MIP recommendation was suitable given Mr W's circumstances, risk appetite, and investment experience, and that monthly contribution PEPs were not available in 1994. The ombudsman concluded that the charges, while documented and illustrated, did not render the recommendation unsuitable for an experienced investor seeking higher equity exposure and returns. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no suitability issues regarding risk and affordability. Mr W was an experienced investor with a balanced to speculative risk attitude, had existing shareholdings, and could afford the contributions. While the CMC argued the MIP charges were excessive compared to a PEP alternative, the ombudsman concluded that in Mr W's specific circumstances as a higher-risk investor seeking 75% equity exposure, the charges alone did not render the recommendation unsuitable. The unavailability of monthly contribution PEPs in 1994 meant the MIP was a suitable recommendation in its own right, not merely a default option. The charges were documented and illustrated to Mr W, and the life cover cost was minimal while providing tax-free payout and some family benefit.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website