Partially upheld: suitability of investment advice, failure to provide agreed services, administrative error in processing withdrawal reduction request complaint against Progeny Wealth Limited

Decision detail

Summary

Mrs D complained that Progeny Wealth Limited failed to manage her investment bond in line with her objectives, specifically that PWL did not recommend increasing investment risk to achieve growth necessary for her funds to last her lifetime. Mrs D is unable to work due to an accident and relies on withdrawals from her investment bond to sustain her expenditure. The ombudsman found PWL's recommendation to maintain a low to medium risk portfolio was suitable given Mrs D's low capacity for loss and reliance on withdrawals, and that increasing risk would have been inappropriate. The ombudsman also found PWL was not obligated to provide ongoing cashflow planning as Mrs D's fee was below the contractual minimum threshold. However, the ombudsman partially upheld the complaint because PWL failed to timely action Mrs D's June 2025 request to reduce withdrawals from £1,200 to £400 per month, only reducing them to £1,000 per month until March 2026, and delayed updating the bond provider with the new advisor details. The ombudsman ordered PWL to pay £250 compensation for distress and inconvenience caused.

The Ombudsman's reasoning

The ombudsman applied FCA COBS rules requiring firms to obtain necessary client information and only recommend suitable investments in accordance with the client's risk tolerance and ability to bear losses. Given Mrs D's personal circumstances (unable to work due to accident, reliant on withdrawals, low investment knowledge, low capacity for loss), the low to medium risk portfolio was suitable and increasing risk would have been inappropriate. The ombudsman found PWL was not obligated to provide cashflow planning as Mrs D's fee was below the £3,500 minimum threshold stated in the client agreement. However, PWL failed to timely action the withdrawal reduction request, causing overpayments from June 2025 to March 2026. The ombudsman rejected reconstruction of the portfolio as Mrs D could not repay the overpayments, instead awarding £200 for distress and inconvenience. The delay in updating advisor details caused minimal impact and £50 was appropriate compensation. Total compensation of £250 was ordered.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website