Upheld: Unsuitable investment advice and failure to provide ongoing advisory services complaint against Ascot Lloyd Limited
Financial Ombudsman decision DRN-6380581 of 2026-05-22T00:00:00+00:00. Unsuitable investment advice and failure to provide ongoing advisory services complaint against Ascot Lloyd Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6380581 |
|---|---|
| Decision date | 2026-05-22T00:00:00+00:00 |
| Firm | Ascot Lloyd Limited |
| Product | ISA (Individual Savings Account) - specifically AIM ISA (Alternative Investment Market) |
| Claim type | Unsuitable investment advice and failure to provide ongoing advisory services |
| Outcome | Upheld |
| Remedy | AL must: (1) Compare the actual value of Mr T's AIM ISA investment with the notional value had it remained with previous providers from the date of investment to the date of final decision; (2) If actual value is less than notional value, pay the difference as compensation; (3) Add any additional sums paid into the AIM ISA to the notional value calculation from the point of payment; (4) Deduct any withdrawals from the notional value calculation from the point of withdrawal; (5) If previous providers cannot calculate notional value, use the FTSE UK Private Investors Income Total Return Index as benchmark; (6) Pay £200 for distress caused; (7) Pay compensation within 28 calendar days; (8) If payment is late, pay 8% simple interest per year on the loss from the deadline to settlement date. |
Summary
Mr T, aged 75, recently widowed and retired, received advice from Ascot Lloyd Limited in June 2017 to consolidate his five ISAs into a discretionary fund managed AIM ISA for inheritance tax planning purposes. AL recorded his total assets at £964,128 against an IHT allowance of £850,000, but failed to adequately consider that this allowance was scheduled to increase to £1,000,000 by 2020. Although Mr T had a medium attitude to risk and stated objectives of maintaining control and investing for growth, AL recommended an aggressive/higher risk product, justifying this on the basis of his high capacity for loss and willingness to accept unlimited losses for tax incentives. The ombudsman found the advice unsuitable because the potential IHT saving of approximately £45,600 did not justify risking up to £200,000 of capital, particularly given the scheduled threshold increases that would eliminate any IHT liability. AL must compensate Mr T by comparing the actual value of the AIM ISA against the notional value had the funds remained with previous providers, plus £200 for distress caused.
The Ombudsman's reasoning
Although Mr T was recently widowed, it was not inappropriate for AL to provide IHT planning advice. However, the advice was unsuitable because: (1) the potential IHT liability was likely to reduce or disappear due to scheduled increases in the IHT threshold; (2) the recommended AIM ISA involved aggressive/higher risk investments inconsistent with Mr T's medium ATR; (3) the potential IHT saving of approximately £45,600 did not justify risking up to £200,000 of capital; (4) Mr T's stated objectives of maintaining control, investing for growth, and planning his estate were inconsistent with accepting unlimited loss on these funds; (5) AL failed to adequately consider the alternative of leaving funds in existing ISAs, particularly given the scheduled IHT threshold increases. The ombudsman concluded that without the unsuitable recommendation, Mr T would not have transferred his ISAs, and therefore the ongoing service failures are addressed through the compensation remedy.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Ascot Lloyd Limited, all decisions | 26 | 64% |
Source
Read the original decision on the Financial Ombudsman Service website