Life Decision Reference 2022-0340

• Case Outcome: Rejected
• Reference: 2022-0340
• Date: 18 October 2022
• Year: 2022
• Subject Matter: Life
• Finantial Sector: Insurance
• Conducts Complained Of: Failure to provide product/service information

Decision Ref:

2022-0340

Sector:

Insurance

Product / Service:

Life

Conduct(s) complained of:

Failure to provide product/service information

Outcome:

Rejected

LEGALLY BINDING DECISION

OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

Background

This complaint arises from an investment in a geared property fund, which the

Complainant states was mis-sold to him by the Provider in or around late 2004 / early

2005.

This complaint was received by the Financial Services Ombudsman Bureau (the “FSOB”) on

2 March 2011. At that time the FSOB could not investigate a complaint of mis-selling which

had occurred before 2 March 2005, because pursuant to section 57BX of the Central Bank

and Financial Services Authority of Ireland Act 2004, the applicable legislation at that

time, the FSOB could investigate complaints, only when the conduct complained of had

occurred in the six-year period before the complaint was made. The FSOB did however

investigate a secondary complaint the Complainant had also made in March 2011, about

ongoing advice the Complainant received after the investment’s inception, and a Legally

Binding Finding regarding that secondary complaint, was issued to the parties by the FSOB,

on 9 January 2012.

On 12 January 2018, the Complainant’s solicitors wrote to this Office following the

enactment of the Central Bank and Financial Services Authority of Ireland (Amendment)

Act 2017, (which in July 2017, provided for expanded time limits for bringing a complaint

to the FSOB in certain specified circumstances), and they requested that the mis-selling

complaint be re-opened and investigated.

- 2 -

/Cont’d…

In the context of the creation of the Office of the Financial Services and Pensions

Ombudsman, (“this Office”) with effect from 1 January 2018, an assessment of the

jurisdiction of this Office to investigate the mis-selling complaint was carried out, and this

Office outlined in a Preliminary Opinion on Jurisdiction dated 4 June 2019, that the mis-

selling complaint was made within the applicable statutory time limits, set out in the

Financial Services and Pensions Ombudsman Act 2017 (the “FSPO Act”). Neither the

Complainant nor the Provider disagreed with the Preliminary Opinion on Jurisdiction.

The Complainant’s Case

The Complainant states that in December 2004, he approached the Provider’s

representative Mr X, in order to obtain advice about the options available to him regarding

his pension arrangements. In particular, the Complainant consulted Mr X and received

advice regarding the investment of the proceeds of a personal pension plan he already held

(the “Original Pension Policy”). The Complainant states that “as far as I knew at that time,

this was worth only €125,000, I felt I had to do something better”.

The Complainant says that on or about 31 January 2005, he decided to invest the proceeds

of his Original Pension Policy in a geared UK commercial property fund. The Complainant

entered into a ‘Personal Retirement Plan’ which was a life assurance-based investment

policy, (the “Investment Policy”) supplied by an Insurer, through which the investment in

the geared UK commercial property fund was effected. The investment was ultimately

effected on 16 March 2005, when the Complainant instructed that €184,940 be invested in

the geared property fund.

During the following period, the value of the Complainant’s Investment Policy fell

dramatically and, in correspondence sent to him in October 2010, he was informed that it

had a ‘nil value’.

The Complainant asserts that the Investment Policy in question was “wholly unsuitable” to

his needs at the time, having regard to his age and financial position, and in circumstances

where the entirety of the proceeds of his only pension, were recommended by the Provider,

to be invested in a “high risk” geared property fund. The Complainant asserts that this was

not a prudent investment. He says that he did not realise the unsuitability of the Investment

Policy until it had collapsed in late 2010.

In his response to the Provider’s Final Response Letter, the Complainant explains that,

contrary to Mr X’s assertion, his wife did not attend any meeting with the Provider. He says

that while a second investment option was “mentioned briefly”, the “[Investment Policy]

was the one [Mr X] was highly recommending”.

The Complainant also disputes the Provider’s assertion that Mr X advised the Complainant

not to invest all of the proceeds of the Original Pension Policy in the Investment Policy, and