Ashcourt Rowan has been told to pay compensation to a client with a medical condition after they failed to recommend an enhanced annuity to him in 2002.
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.
Ashcourt Rowan argued it was not required to hold onto its files indefinitely and that it would be unfair to reach an adverse decision because it no longer had a record of the conversation.
A spokesman for Ashcourt Rowan said the adviser would have asked about his health, so the client cannot have disclosed his medical condition.
But in a final decision, ombudsman Alison Cribbs said ill health was an important factor that would influence the annuity rate offered, so the adviser should have asked Mr Y about his health.
Ms Cribbs said: “I agree with Ashcourt Rowan that 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 could not investigate Mr Y’s complaint so the Financial Ombudsman Service got involved.