View more on these topics

Watchdog U-turn clears IFA over bond misselling

A Scottish IFA which shut down after losing a precipice bond misselling claim could get just 900 compensation after the Financial Ombudsman Service reversed its original decision.

Save & Invest (Glasgow) Limited went into liquidation when it could not pay a misselling claim upheld by Financial Ombudsman Service adjudicators.

The company’s directors had thought they would win the case and were fearful of further claims for misselling of structured products so felt forced to put the business into
liquidation.

When liquidator Kroll took over the running of the firm, the directors decided to fight for their reputation and enlisted legal help to put forward a fresh argument to the FOS.

The original misselling ruling was overturned after the FOS decided that the low to medium-risk rating for the product was appropriate and that the decision process made in the
case had been wrong.

Now the only course of redress for the company, which is still in liquidation, is a claim to the FOS’s independent assessor. But the assessor can only award a nominal sum. Last year, firms that had cases mishandled by the ombudsman were mostly paid between 100 and 125. Four cases received between 500 and 900.

Save & Invest (Glasgow) former director Jeffrey Deans says the company had no option other than to make a financial decision to close the firm after the original Fos decision
was made.

Deans says: “The Fos disputed the risk rating that we had given the product. With Save & Invest,we had sold a number of structured products. If this decision was disputed, it meant that more clients could pursue compensation. If further claims arose, then we would investigate them. We have a reputation to protect.”

Financial Ombudsman Service spokesman Alison Hoyland says: “Firms which think that their case has been mishandled can appeal to the independent assessor. If their claim is upheld, they could be awarded a nominal sum.”

Recommended

Out of context

“Let’s hope too many customers don’t fall asleep in their mortgage interview. At least they will have lots of paperwork to make into a quilt to keep warm.” – AMI policy officer Ben Stafford on documentation for mortgage customers. “I’ve been looking for a worthwhile job for about the last 17 years.” – FSA managing […]

Savings at stake

Has the Government learned from the stakeholder pension debacle or is it repeating its mistakes?

Guide

Guide: what you need to consider for your auto-enrolment project

In this guide, Johnson Fleming reveals what items you need to understand to gauge the impact of auto-enrolment on your business. The guide focuses on: the impact that your auto-enrolment scheme will have on you; assessing your workforce; understanding your staging date; reviewing your current provision; and modelling contribution levels and costs.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment