Not upheld: ISA / savings administration complaint against Countrywide Assured Plc

Decision detail

Summary

Mr B complained that Countrywide mis-sold him two savings plans taken out in November 1989 and February 1991, seeking compensation in line with asset-backed investments. Countrywide had upheld complaints about two other policies but defended these two, arguing the 23-25 year holding periods demonstrated affordability and suitability. Mr B argued the policies were unsuitable, lacked flexibility due to front-end charges, and that a superior alternative Investment Programme should have been discussed. The ombudsman found the policies were suitable based on Mr B's circumstances, long-term investment horizon, ability to afford premiums, appropriate fund selection, reasonable returns, and the justified inclusion of life cover for tax purposes, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that the policies were suitable for Mr B's circumstances based on: (1) his long-term investment horizon and ability to afford the premiums as evidenced by holding the policies for 25 and 23 years respectively; (2) the investment in the lowest-risk Managed Fund being appropriate for his profile; (3) the inclusion of life cover being justified by his mortgage obligations and providing tax-qualifying benefits; (4) the reasonable returns achieved (Mr B paid £4,620 and received £9,620.32 for one policy; paid £7,150 and received £6,260.10 for the other); (5) the flexibility offered through partial surrender options; and (6) the guaranteed minimum benefit providing capital protection. The ombudsman rejected arguments about alternative products not being discussed, noting this was not a regulatory requirement at the time and that the alternative would have required tripling his monthly premium.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website