The adjudicator said Romilly should have recommended the ten-year option as the difference in income was not significant but payment would have been received over a longer period.
But Romilly disagreed saying Mrs G wasn’t its client and that its advice to Mr G hadn't been unsuitable.
It also noted the annuity with a ten-year guarantee was more expensive in real terms and the fact that the five-year guarantee transpired not to be the most appropriate product didn’t mean it was inappropriate.
Ombudsman Keith Taylor, said while the ten-year guarantee was more expensive, the difference was small and the benefit of taking a reduced income would have been a gain of five years of payments equating to £24,000.
Mr Taylor said: “I think the adviser probably ought to have recognised the apparent value in the annuity with a ten-year guarantee when compared to the five-year guarantee. Even though the ten-year guarantee period didn’t match Mr G’s specific needs, I think the value of it was such that it ought to have been recommended to Mr G.”
Therefore he upheld the complaint on the basis the advice to Mr G was unsuitable due to the omission of information about a ten-year guarantee annuity.
Mr Taylor said: “Had Mr G been fully informed, I’m satisfied that he would have made different choices and purchased an annuity with a ten-year guarantee period.”
Romilly was ordered to put Mrs G in the position she would be in if the unsuitable advice was not given. This involved comparing actual income received from the five-year annuity and any gain which would have been received if Mr G had gone for a ten-year annuity.
It must also pay £250 to reflect the distress and upset caused by missing out on the extra income.
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