Skipton should have revisted a client’s financial plans as soon as she re-established contact with the building society’s adviser following her husband’s death, the Fos has ruled.
Responsibility for making sure advice given to Mrs M before her husband died was carried out in the months following his death rested with Skipton, not the widow, the ombudsman said.
In 2013, Mrs M met with a Skipton adviser to discuss an investment due to mature in early 2014.
The adviser recommended Mrs M invest around £34,000 into the collective scheme, to be funded from Mrs M’s maturing investment and the proceeds of an investment bond.
The adviser set the collective in place ready to accept the expected funds.
But Mrs M’s husband died shortly after her meeting with the adviser and she didn’t return to see the adviser until spring 2014.
One Isa investment was transferred to the collective automatically in January 2014.
In March that year, Mrs M gave the adviser a cheque for the proceeds of her bond and in June 2014 Mrs M paid a final amount into the collective.
But six months later Mrs M discovered her maturing non-Isa funds had not been invested as she expected, and were lying dormant and not attracting any interest.
A Fos adjudicator initially ruled the adviser had clearly set out the process for Mrs M, and agreed it was right she was not contacted in the period after her husband’s death.
The adjudicator noted it was Mrs M herself, due to the unfortunate circumstances, who delayed the proceeds of the bond being added to the collective.
But the adjudicator also felt once Mrs M had returned to see the adviser in March 2014, she was ready to discuss her finances.
Mrs M has paid the bond proceeds to the collective scheme and the adjudicator said the adviser should have sorted out the maturing investment at that point.
Skipton disagreed, arguing their adviser acted appropriately and respectfully towards a vulnerable customer.
But reviewing the case Philip Roberts, ombudsman, said he agreed with the initial Fos ruling, stating once Mrs M indicated she was ready to start dealing with matters again the same considerations meant Skipton should have helped her at that point.
Mr Roberts said: “It should have checked that everything was in order and proceeding in the way she wanted – particularly as it should have noticed that things had not happened in the way it had originally agreed.
“Clearly it would have been wrong to pressure Mrs M. But equally, Skipton could have tried to make sure that Mrs M did not over-look anything – which was possible for any one in a difficult situation with a lot of things to sort out.”
A refund of £259.07 was paid to Mrs M in October 2014 due to her overall lower investment amount and £100 compensation was offered by Skipton in relation to the delay in refunding this amount and to cover the loss of interest.
To compensate Mrs M, the ombudsman has now ordered Skipton to compare the performance of Mrs M’s investment with that of the benchmark and pay the difference between the fair value and the actual value of the investment.
If the actual value is greater than the fair value, no compensation is payable.
The building society was also told to pay the £100 it offered already, if it had not already paid Mrs M this sum.
