In response to the Financial Ombudsman Service declaring itself “surprised” that an intermediary has tried to shift liability for failing to carry out basic financial planning to their client, this sounds like a reasonable adjudication to me. What case is he talking about?
Although, presumably (policy terms permitting), the claimant should reduce the sum assured immediately to the appropriate level. The adviser should have asked about the husband’s nil rate band and whether there are any trusts in place and recorded the answers. To say they did not know about the existence of a trust because it was not recorded on the fact-find does not mean they asked the question.
What interests me about the Mountbatten Financial Ltd case is how the trust came about. If this was as a result of a will trust from the husband, then presumably, the level of inheritable nil rate band would have been reduced. It does not change the culpability aspect, but might have had a bearing on the inheritance tax liability, so the level of protection required.
Having never had any dealings with Fos, I do not know how much they will look into the facts of the case and ask questions themselves.
Chris Burden
Financial Adviser
RDS Financial Consultants, Farnham, Surrey
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