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FOS orders Intrinsic to pay investors over ‘unsuitable’ advice

The Financial Ombudsman Service has ordered Intrinsic to compensate investors for “unsuitable” investment advice.

In a final decision notice from September, published this week, the FOS said Intrinsic failed to assess client risk properly and recommended unsuitable funds.

In 2007, Mr and Mrs D were recommended investments by an Intrinsic adviser but the meeting was not documented.

The original fact-find found the clients’ appetite to risk to be “low” but a further questionnaire led the adviser to describe their approach to risk as “cautious to moderate”.

In his final recommendations, the adviser said the clients would accept “average risk” due to their preference for equities over fixed interest assets.

The ombudsman criticised “inconsistencies” in Intrinsic’s approach to assessing risk from the evidence provided.

Ombudsman James Harris said: “I’m not persuaded the funds recommended by the adviser were consistent with the information he had recorded at the two meetings with Mr and Mrs D about their approach to risk.

“So, having considered all the available evidence, I find the recommendation to invest in the bond was not suitable for Mr and Mrs D’s needs or objectives.”

Intrinsic was ordered to pay compensation to restore the client to a fair value of the investment.

Intrinsic declined to comment.


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. Must be a slow news day. Can’t you lot find something more interesting or relevant ???

  2. It must be a slow news day.

  3. One single case of doubtful advice. Big deal.

  4. A bit of a non-story except that it does tell us that your suitability report needs to match your fact find.

    If, following the completion of the Fact Find, the client decides there ATR is different then you need to record that they changed their mind and how that change of mind came about.

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