Client signs to say she was not receiving advice, FOS rules she thought she was receiving advice

This is a complex case and involves many issues.  A quote from the actual decision is shown below, but despite this the Ombudsman says the client thought she was receiving advice. 

“Mrs H says she agreed to invest believing the fund was safe and that her money would be tied up for just two years.

LP arranged the SIPP on behalf of the Harlequin agent. And says it did so on an “execution only” basis; having satisfied itself it could do so using forms provided by the SIPP administrator.

Mrs H signed a form with a box ticked which said that she had not received advice about the SIPP and the underlying investment. She would therefore be classed as an Execution Only customer.

A declaration in the form said that Mrs H understood that she had not received any advice from the SIPP provider or a regulated independent financial adviser. She had decided to invest based on the information provided by the investment provider.

The declaration also contained statements about the risks. This made it clear that there was no guarantee and that there were higher risks. And that Mrs H could get back less than the amount invested.

It also explained that Mrs H might not easily be able to sell the investment. And that the investment was not covered by the Financial Services Compensation Scheme or the Financial Ombudsman Service.

Mrs H also signed other forms provided by the agent which said no advice was given.”

Later the ombudsman says:

“Mrs H did sign some declarations to say that she had not received advice. But, she has explained that she was referred to a pensions expert. In my view, it’s likely that she thought she was receiving advice”

There have been other cases regarding pensions and advisers and in one the Pensions Ombudsman and the FOS come to opposite views.

The FOS formal decision by Ombudsman Milne is FOS decision which can be found on the FOS website via their FOS published decisions facility here.
Search for this reference…DRN5069210

Discussion of this case in an FT Adviser article

Another viewpoint in FT Adviser

FOS and Pensions Ombudsman reach opposite decisions

Professional Adviser

Only 1/2 advisers are confident clients understand them



Categories: FOS

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