Bonds Decision Reference 2024-0189

• Case Outcome: Upheld
• Year: 2024
• Reference: 2024-0189
• Date: 13 September 2024
• Subject Matter: Bonds
• Finantial Sector: Investment
• Conducts Complained Of: Failure to process instructions in a timely manner,Failure to inform of drop in value, Failure to provide correct information

Decision Ref:

2024-0189

Sector:

Investment

Product / Service:

Bonds

Conduct(s) complained of:

Failure to process instructions in a timely manner

Failure to provide correct information

Failure to inform of drop in value

Outcome:

Upheld

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

The Complainant held an International Portfolio Bond with the Provider.

The complaint concerns the Provider’s failure to process, in a timely manner, the fund

switch instruction that the Complainant’s Independent Financial Advisor emailed to the

Provider on Tuesday 17 March 2020, and the poor customer service and communication

that the Provider proffered to the Complainant and his Independent Financial Advisor, in

respect of the information it gave in relation to this fund switch instruction.

The Complainant’s Case

The Complainant says that on 17 March 2020, following advice from his Independent

Financial Advisor (‘IFA’), he authorised his IFA to complete a Fund Switch Request to the

Provider, instructing it to sell 95% of the units he held in a UK Property Fund and use the

proceeds from this sale, at the time expected to be in the region of Stg £1,000,000.00 (one

million Sterling Pounds), to buy units in a Financial Times Stock Exchange Tracker Fund

(‘FTSE Tracker Fund’), in order to take advantage of the Financial Times Stock Exchange

100 Index having fallen below 5,000 points.

The Complainant notes that the Provider has confirmed that it received this Fund Switch

Request on 17 March 2020. He also notes that the UK Property Fund, from which he

wanted to exit his investment, was suspended on Wednesday 18 March 2020.

- 2 -

/Cont’d…

The Complainant notes that the Provider says that it received notification from the

relevant Fund House at 11:55 on 18 March 2020 that the UK Property Fund had been

suspended.

The Complainant says that his IFA telephoned the Provider on Thursday 19 March 2020 to

query if the fund switch instruction had completed and he notes that despite the Provider

having been notified on 18 March 2020 that the UK Property Fund from which he wanted

to exit, had been suspended, the Call Handler advised his IFA that the sale transaction had

been placed and was proceeding.

The Complainant says that his IFA, having since learnt that the UK Property Fund had been

suspended, telephoned the Provider again on Monday 23 March 2020, to query if the

trade was going to complete, as it was still showing as “pending” on the online trading

platform. The Complainant says that the Call Handler assured his IFA that the sale

transaction was proceeding.

The Complainant says that the Provider did not notify his IFA until Tuesday 24 March 2020

that the sale transaction had been rejected, despite it having being notified on 18 March

2020 that the fund from which he had wanted to switch, had been suspended.

The Complainant says that by the time he had been fully briefed on the matter by his IFA

on 26 March 2020, the FTSE 100 Index had risen by over 16% and that the opportunity to

take advantage of it having fallen below 5,000 points, had passed.

The Complainant says that if the Provider had informed his IFA on 18 March 2020, that the

UK Property Fund had been suspended, this being the date the Provider was first made

aware of the suspension, or on 19 March 2020, the date when his IFA telephoned the

Provider to ascertain if the fund switch instruction had completed, he would then have

taken alternative action, by way of selling units from a different fund in his International

Portfolio Bond, to purchase units in the FTSE Tracker Fund, in order to benefit from the

low market price.

The Complainant says that the Provider failed to process, in a timely manner, the fund

switch instruction that his IFA had emailed to it on 17 March 2020, and that the Provider

then provided his IFA with erroneous information in relation to the progress of the sale

transaction, which prevented him from taking different action at that time.

The Complainant advises in the FSPO Complaint Form he completed, that in order to

resolve this matter, he seeks compensation from the Provider in the amount of Stg

£160,000.00 (one hundred and sixty thousand Sterling Pounds) and in this regard, he

submits that:

“I believe that I have been financially disadvantaged by the fund switch not happening and

the misinformation given by [Provider]. The cost to me has been approximately 16%

(5800/5000) of the failed transaction. The switch amount was for £1M so would like to

compensated for my loss of £160,000”