“My view was that Mr K wouldn’t have invested in the overseas property, so any loss Mr K had suffered through that investment had been caused materially by Insight.”
Insight was removed as Mr K’s adviser in 2011.
When looking at whether the second adviser could be to blame for Mr K’s losses by failing to advise him to withdraw the investment, the Fos decided this was not the case as by that point the client had no reason to be concerned, so "if the new adviser had pointed out the high levels of risk associated with the investment, this would in my view have simply restated those issued by Insight".
The Fos found that given the proximity of the earlier advice from Insight (less than a year before) and the same risks being present, it seemed unlikely that Mr K would have withdrawn from the investment at that point, even if advised to do so by the second adviser.
Stirling said: “I remain of the view that the loss stems from Insight’s initial advice [...] I also consider that the timing of the second adviser’s involvement, together with the overall circumstances at that time, meant that the second adviser’s actions didn’t undo (or 'obliterate') what had already been done by Insight.”
Therefore, the Fos ordered Insight to reimburse the client’s pension as if he had never invested in the unregulated scheme.
The Fos also said the firm should pay towards some of Mr K’s Sipp fees as there may be illiquid holdings preventing the wrapper from being closed.
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