Investments  

Axa client complains about Isa advice

Axa client complains about Isa advice

The Financial Ombudsman Service has agreed with Axa that it needs to make partial amends for an Isa recommendation made by one of its advisers.

Mrs R complained about Axa Wealth Services Limited in January 2014 when she received a statement that recorded the current value of her investment, showing it had dropped below the sum invested in April 2011.

She was told, however, that the firm no longer offered financial advice.

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After reviewing the case, Axa admitted that she should only have been told to invest half the amount and offered to recompense her in one of two ways.

But Mrs R said all her money should be returned along with interest and therefore complained to the ombudsman.

In a final decision, ombudsman James Harris agreed with Axa and said Mrs R needed to choose one of the offers the company made.

He acknowledged what Mrs R has said about the pressure she felt under to take out the investment and accepted the adviser may have been overly encouraging about the potential return available, but also said she was provided with information that explained the risks involved and was in a position to accept a degree of risk with a proportion of her money.

Mr Harris said he did not think Axa should be required to refund the whole amount. “I’m satisfied the charges were provided to Mrs R within the documentation provided to her at the point of sale.”

In respect of the decision to no longer provided advice, he said this was a decision Axa was entitled to make. “Ultimately, although frustrating for Mrs R, it didn’t impact upon the suitability of the advice.”

Mrs R said she had agreed to the investment because she believed what the adviser at Axa had told her, believing she would be able to rely on the adviser to discuss her investment in future.

After reviewing the advice given to Mrs R, Axa said that while it did not think the investment was wrong for her in general, it did think too much of her money had been committed to it.

The provider offered two options for settling her complaint, which would take into account the value of her holding at the date of calculation.

The first option was to refund half the capital and then add interest over the period, which assumed Mrs R would have kept half her money back and placed it in a fixed term deposit account.

The second option was for Mrs R to keep her Isa in place, but be paid the equivalent sum of interest that would have been earned on the amount that should not have been invested. This payment of interest would be made outside the Isa wrapper.

A Fos adjudicator concluded there was sufficient information contained in the documentation Mrs R had been given to explain clearly what the investment was and how her money might be affected by investing in it.