FOS rules against adviser over 70-year-old’s £500k investment


The Financial Ombudsman has dismissed the claims of an advice firm that a client understood the risks of an equity-heavy investment of around £500,000.

Jones Financial disagreed with an earlier adjudicator’s ruling that said Miss G should not have been recommended any investment at all.

The advice firm said the adjudicator has been persuaded by the complainant “pulling at her heartstrings” and that it was untrue Miss G did not have any knowledge of investments.

But the Ombudsman backed the adjudicator and ordered Jones Financial to pay £100 and make up any difference between Miss G’s investment and what it would have been if invested at base rate plus 1 per cent, with an additional simple 8 per cent interest rate on any loss.

Ombudsman Roger Yeomans says: “How did it come about that a person nearing 70 years of age with a substantial pension income, who’d never held any investments and who was suffering from a life-threatening illness, placed around half a million pounds (nearly all of her assets) in one open-ended investment company which exposed around 50 per cent of that money to the vicissitudes of the world’s stock markets?”

He adds: “I don’t see why Miss G, with so much money and no dependents, and with a life-threatening illness, would wish to subject herself to the as yet untried, the unfamiliar and potentially nerve-racking experience of watching her fund value – which comprised nearly all of her assets in one place – rise and fall in line with the world’s stock market.

“And indeed when Miss G found herself subjected to that experience, it was too much for her.”