I am writing in reference to the news about TenetConnect Services being told to compensate a couple mis-sold mortgage payment protection insurance in 2005 (FTAdviser, 3 August).
Having read the case, this policy was advised to be purchased during one meeting. It is not sufficient to rely on policy documents as it would be impossible for the couple to read them at point of sale.
Mr and Mrs R did not accept the recommendation for Mrs R and therefore displayed they had a choice on whether to take the policy or not.
The adviser may have told them that this would not cover Mr R’s pre-existing condition, they may not have. This should have been covered in the suitability letter or any subsequent documentation to make it clear he would not be covered.
As the advice process was concluded in a single sitting, the adviser has to explain what was recommended, why it was appropriate and what the risks were. Clearly a risk warning should have been: ‘This cover will not cover your pre-existing condition’.
It appears in this case that the application form was the ‘reasons why’ letter and did not make this risk clear, therefore basic suitability regulations have been missed and a basic error has led to this complaint being upheld.
Daniel Elkington
IFA,
Chattertons,
Boston,
Lincolnshire,
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