Not upheld: Investment mis-selling complaint against Radiant Financial Planning Limited

Decision detail

Summary

Mr and Mrs M complained that Radiant Financial Planning Limited mis-sold them AIM shares within a Stocks and Shares ISA in 2021/22, claiming they received poor advice unsuitable for first-time investors and that the investment lost one-third of its value within two years. Radiant defended the advice as suitable given Mr and Mrs M's substantial property portfolio, lack of liabilities, and primary objective of mitigating inheritance tax liability. The FOS investigator found the advice was fair and suitable, and the ombudsman upheld this finding, distinguishing between suitable advice and most suitable advice, and rejecting the argument that poor short-term performance indicated mis-selling. The ombudsman noted that the AIM investment strategy was appropriate given their financial circumstances and documented attitude to risk, and that any investment carries risk of loss.

The Ombudsman's reasoning

The ombudsman distinguished between 'suitable' advice and 'most suitable' advice, finding that Radiant's recommendation was suitable to Mr and Mrs M's documented objectives and attitude to risk. The ombudsman noted that any investment carries risk and losses do not automatically indicate unsuitable advice. Given Mr and Mrs M's substantial property portfolio and financial position, a higher-risk investment would not significantly impact them if lost entirely, while successful AIM investments could achieve substantial tax advantages through Business Relief and ISA tax wrappers. The ombudsman rejected the argument that poor short-term performance indicated mis-selling, as suitability cannot be judged with hindsight.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website