Investments  

Fos upholds complaint over ‘unsuitable advice’

Fos upholds complaint over ‘unsuitable advice’

The Financial Ombudsman Service has upheld a complaint against Crowe Clark Whitehill in which now-deceased Mrs S was given ‘unsuitable advice’.

Mrs S died in 2010 and, before she died, her son Mr S acted as her attorney.

Mr S is now an executor of his mother’s estate and has complained that Crowe Clark Whitehill Financial Planning Ltd gave him poor advice to invest in EEA Life Settlements in July 2009 and to make another investment in 2010.

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Crowe Clark Whitehill agreed that they advised Mrs S, but argued they did not offer advice on the second investment.

Ombudsman Philip Roberts said Crowe Clark Whitehill knew Mr S was making the investment for Mrs S, and it knew he was doing so on the same basis as the first investment.

Mr Roberts said: “The firm either repeated that advice or failed to warn Mr S that a proper process should be followed so that properly considered advice could be given.

“Either way I consider that it is fair and reasonable that the firm is responsible for the second investment also. It was also unsuitable.”

Despite the fact that Mrs S was only prepared to accept a small element of risk with her capital, Mr Roberts said the investment risk was higher risk.

Mr Roberts said the executors of the estate of Mrs S should be paid a calculated amount if Mrs S suffered a loss as a result of this advice. However, if no loss has been suffered under the calculation then no compensation is payable.

He said: “The firm says there is no loss. That could be right. I will, however, make my decision in the same way as my provisional decision, and the firm should provide the executors with a copy of its calculations.

“If the calculations are accurate that will be the end of the matter and no redress will be payable. If the calculations are in error, and a loss has been suffered, compensation will be a payable.”

Crowe Clark Whitehill said it was disappointed with Mr Roberts’ provisional findings.

ruth.gillbe@ft.com