The Financial Ombudsman Service has decided not to uphold a complaint against Caerus Financial, over a man who bought a flexible annuity with his income drawdown fund.
Mr C was unhappy about his advice and said he thought there would have an arrangement that would preserve the capital, as he wanted his wife, Mrs C, to benefit from the money on his death.
He also wanted income drawdown and not an annuity.
Back in 2011, Mr C was advised to buy a flexible annuity, which had a 10-year guarantee period and a 50 per cent spouse’s annuity.
As such, the annuity did make some provision for Mrs C if he were to die before her, but it did not preserve her capital on death.
However, despite his complaint that he wanted income drawdown and not an annuity, this alternative had been considered by Caerus Financial and was documented in its financial report on the matter.
Caerus Financial did not uphold the complaint because the firm said Mr C understood the position when he started the annuity and it was discussed at later meetings.
Mr C later said he needed income drawdown because of his ill health, stating that the firm had ignored this. However, he was in good health at the time the advice was given.
In his final decision, ombudsman Keith Taylor stated he was satisfied Caerus recommended an annuity after other options were discussed with Mr C.
“I think the document from the time of the advice, including the key features document from the annuity provider, do make it sufficiently clear that Mr C was buying an annuity,” the decision notice read.
“The product is called an ‘income choice annuity’ and I think that he knew or ought to have known the effects of that - that he’d given up this portion of his capital for a guaranteed income.
Mr Taylor noted there had been some disagreement about whether Mrs C was present at some of the meetings with Caerus. “I don’t believe I need to decide whether she was or wasn’t present in order to make my decision.
“As I’ve said, I’ve looked at the documents from the time of the advice and I think these set out the advice and the basis for it with enough clarity.”
ruth.gillbe@ft.com
