Pensions  

Ashcourt Rowan must compensate for annuity advice

Ashcourt Rowan must compensate for annuity advice

Ashcourt Rowan has been told to cough up compensation for a client with a medical condition who they failed to recommend an enhanced annuity to.

In 2002 Ashcourt Rowan failed to advise a client with a medical condition he should have received an enhanced annuity rate.

The man, referred to as Mr Y, contacted Ashcourt Rowan in 2014 to make a complaint but was told by the intermediary it did not hold records relating to the advice given to him in 2002.

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Ashcourt Rowan complained it is not required to hold onto its files indefinitely and would be unfair to reach an adverse decision because it no longer had a record of the conversation.

A spokesman for Ashcourt Rowan argued the adviser would have asked about his health so the client must not have disclosed his medical condition.

But in a final decision, ombudsman Alison Cribbs said ill health was an important factor that will influence the annuity rate offered so the adviser should have asked Mr Y about his health.

Ms Cribbs said: “I agree with Ashcourt Rowan it is not required to hold onto its files indefinitely. But, where full records are not available, I must reach a decision based on the evidence that is available, and what I consider is most likely to have happened in the circumstances.

“I am persuaded that Mr Y would have disclosed his medical condition to the adviser if he had been asked, and if the implications of eligibility for an enhanced annuity rate had been explained to him.

“I’m persuaded, on balance, that the adviser either didn’t ask Mr Y, or didn’t act on the information supplied to him.”

A spokesman for Ashcourt Rowan said the intermediary couldn’t investigate his complaint so the Financial Ombudsman Service got involved.

Mr Y’s annuity provider confirmed it offered enhanced annuity rates based on ill health at the time the advice was given.

Mr Y’s doctor confirmed the client had been diagnosed with his medical condition in December 2000.

The annuity application form did not ask any health questions but a Fos adjudicator thought the adviser should have asked Mr Y if he was suffering from any health problems.

If this had been done the adviser could have told the insurer and investigated whether Mr Y qualified for an enhanced annuity rate.

But Ashcourt Rowan did not agree with the adjudicator’s conclusions arguing Mr Y’s recollection of events seemed to be unclear.

The Fos ordered Ashcourt Rowan to put Mr Y as close as possible to the position he would have been in had he purchased an enhanced annuity in 2002 plus add 8 per cent interest.

Ashcourt Rowan was also told to pay Mr Y £200 for his trouble and upset.