The Financial Ombudsman Service has rejected a complaint made by a claims management company for a blind Sanlam client.
A client, known as Mr S, used a claims management company to complain to the Financial Ombudsman Service about two savings plans recommended by Sanlam Life & Pensions UK Limited in 1988 and 1989.
The compensation chasing company said Mr S did not have a requirement for plans with such long terms and the terms were misrepresented as Mr S was led to believe they were suitable as medium term investments.
The claims manager also said there was no evidence other savings options were discussed.
Sanlam rejected the complaint and pointed out the adviser’s duty was to recommend a suitable product but he did not have to provide a list of alternative products.
There were nothing to show what the adviser discussed but Sanlam stated it had not seen enough to be convinced the adviser acted incorrectly.
Sanlam also said the information Mr S would have received about the plans would have provided sufficient explanation the plans were for long term investment and Mr S signed to confirm he had received the brochures.
Mr S would also have received a letter with illustrations showing what he might recover at various dates so would have known what he was likely to receive when he surrendered the plans.
A Fos adjudicator stated while there was a lack of evidence it was not uncommon for such plans to be sold until retirement age so she did not think the term was inappropriate.
She did not think the life cover meant the plan was not appropriate as Mr S was married and his wife would have benefitted from the death benefit if he died.
The adjudicator thought the product literature would have made Mr S reasonably aware of the nature and term of the plans. She said there was not sufficient evidence to support the view the plans were not suitable.
I also have no reason to believe the adviser didn’t describe the plans to Mr S as they were explained in the product literature.But the claims management company did not agree with the Fos adjudicator.
The claims manager claimed the adviser who sold the second savings plan in 1989 to Mr S thought most salespeople promoted the plans as being appropriate for medium to long term savings and it was only later it became clear they were not suitable for medium term savings.
The CMC also said Mr S believed the plans were suitable to be cashed in at 10 years and added as he was blind he would have been unable to review the product literature in detail.
As agreement has not been reached the matter has been referred to me for review.
Philip Gibbons, ombudsman, ruled he had not seen enough persuasive evidence to convince him Sanlam misrepresented the plans to Mr S.
While there is no record of the discussions that took place when either plan was sold to Mr S, Mr Gibbons said because of the length of time since the plans were sold, and also the time since they were surrendered, this was unsurprising.
He pointed to the terms and conditions of the plan, which stated: “Your programme provides an investment for your long term savings.
“The programme is designed to grow steadily with the optimum benefit and worth being realised after about 25 years”
Although there is reference to steady growth, Mr Gibbons said the terms and conditions would not have given the impression the plans were suitable to be cashed in after 10 years.
In response to the claims manager stating Mr S is unlikely to have read the information he was sent “in detail anyway” as he is blind, Mr Gibbons noted the fact the claims management company said he wouldn’t have read it in detail suggests he was able to read some of it.
Mr Gibbons said: “I also have no reason to believe the adviser didn’t describe the plans to Mr S as they were explained in the product literature.”
