Investment Decision Reference 2022-0145

Case OutcomePartially upheld
Subject MatterInvestment
Reference2022-0145
Date22 April 2022
Finantial SectorInvestment
Conducts Complained OfMis-selling
Decision Ref:
2022-0145
Sector:
Investment
Product / Service:
Investment
Conduct(s) complained of:
Mis-selling
Outcome:
Partially upheld
LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN
This complaint relates to advice given to the Complainant by the Provider, who was a
Broker, in relation to three pension products as follows:
An Executive Retirement Plan which made a single investment in a Geared Property
Fund in June 2005. The Executive Retirement Plan is a single person occupational
pension scheme.
An Executive Pension Plan incepted in July 2005.
A Retirement Bond incepted in December 2010.
The Complainant, who makes this complaint in his personal capacity, is also a director and
shareholder of a Limited Company (the “Company”). That Company has one other
shareholder.
The Company is named as the Employer and sole Trustee of the Complainant’s Executive
Retirement Plan and his Executive Pension Plan.
The Complainant is the sole member of both the Executive Retirement Plan and the
Executive Pension Plan, and he is the plan holder of the Retirement Bond.
The Complainant’s Case
- 2 -
/Cont’d…
The Complainant explains that his first business encounter with the Provider Broker, was in
1993 when he started a pension. The Complainant continues to detail that he commenced
a Defined Contribution Occupational Pension Scheme in July 1996 (the “DC Scheme”)
when he was 37 years old and normal retirement age was set at 60.
The Executive Retirement Plan and Geared Property Fund
The Complainant states that some nine years later in June 2005, he received a telephone
call from the Provider telling him about a product which he should invest in the Geared
Property Fund (the “Fund”). He says that there was no discussion of the features of this
product or the risk, and a product features document was not issued to him. The
Complainant explains that because there was a time factor involved, the Provider asked
that the Complainant fax through an instruction to the pension provider of the DC Scheme,
to cancel the DC Scheme and to transfer the funds to the provider of the Executive
Retirement Plan. The Complainant explains that the Provider sent him the wording to use
when sending the instruction to the pension provider of the DC Scheme, to close that
scheme.
The Complainant states that on 16 June 2005, he followed those instructions from the
Provider and transferred €83,970.89 into the Executive Retirement Plan which made a
100% investment in the Fund. At the time of making this complaint, in 2012, the
Complainant said that he had only become aware very recently, that the investment in the
Fund yielded a commission of €4,192 for the Provider.
The Complainant submits that from the outset, the Provider was aware of his attitude to
risk. The Complainant says he had no financial expertise, and he trusted and relied on the
Provider’s recommendations in respect of the suitability and appropriateness of what was
recommended. When changes were recommended, the Complainant says he
“… went along with those as I deemed him the expert who would act in my best
interests.”
The Complainant explains:
“I have learned that in fact his recommended changes of policy did not match my
financial needs, have cost me thousands of Euros in commissions and charges about
which there was never any discussion, and have left me with no pension options.”
The Complainant states that the Fund is illiquid, and he asked several times for copies of
the Fact Find and Key Features Document relating to the Fund, but nothing has been
forthcoming. The Complainant submits that there were never any specific discussions with
- 3 -
/Cont’d…
the Provider about the Fund and the Provider has failed to provide review notes. The
Complainant states that
“[t]he ‘reviews’ … are when a listing of the various policies was given to me and
when discussion in general terms relating to economic climate took place. There
were no specific references to any of my policies and nothing to indicate that any of
portfolios merited concern.”
The Complainant submits the Executive Retirement Plan investment in the Fund was not
suitable for him and it is unclear to him whether the Provider researched other products in
the market and whether existing policy options were examined, before the Provider’s
recommendations. Referring to the Fund brochure, the Complainant remarks that the
brochure states the Fund is suitable for experienced investors with a tolerance for high
risk. The Complainant states he was not an experienced investor, and this product was
clearly not suitable for him.
The Complainant submits that the Fund should have been thoroughly explained to him,
especially as he was 47 years of age at the time and was about to enter the final decade or
so of his working life. The Complainant states that
“[a]t a time when volatility of investments should be lessened, my then
accumulated funds, which were invested in a medium-risk fund, were put to a high-
risk fund. I know now that this was not a prudent thing to do but I was relying on
the expertise of a qualified Financial Advisor and Broker”
The Complainant details that the value given for the Fund in the Annual Reports, hand
delivered to him by the Provider each year, was a nominal value rather than an actual
value.
Executive Pension Plan
The Complainant details that in July 2005, the Provider contacted him again with regard to
taking out an Executive Pension Plan. He outlines that this was due to him having agreed
to transfer the accumulated monies from the DC Scheme to the Executive Retirement
Plan, because under Revenue rules, no further contributions were possible to the DC
Scheme. The Complainant submits that thereafter, contributions of €1,000 per month
were made “by him” to the Executive Pension Plan between July 2005 and December
2008.
The Complainant says, however, that in late 2008, the business climate worsened, such
that lack of affordability was a problem, so a premium payment holiday was requested. In

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