Multiple Products/Services Decision Reference 2021-0300

• Case Outcome: Partially upheld
• Subject Matter: Multiple Products/Services
• Reference: 2021-0300
• Date: 06 September 2021
• Conducts Complained Of: Failure to provide correct information,Alleged poor management of fund, Dissatisfaction with customer service , Maladministration, Misrepresentation (at point of sale or after)
• Finantial Sector: Investment

Decision Ref:

2021-0300

Sector:

Investment

Product / Service:

Multiple Products/Services

Conduct(s) complained of:

Failure to provide correct information

Dissatisfaction with customer service

Maladministration

Misrepresentation (at point of sale or after)

Alleged poor management of fund

Outcome:

Partially upheld

LEGALLY BINDING DECISION

OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

The Complainants are company directors who make this complaint in their own name. The

products at issue are described in the Complainants’ submissions as occupational pension

schemes and guaranteed income bonds. There are two principal elements of the complaint,

the first relating to a guaranteed income bond that matured in 2011 and the second relating

to the winding up of the Complainants’ occupational pension schemes. The Provider, against

which this complaint is made, acted as intermediary in relation to the pension schemes and

investments that are the subject of the complaint.

The Complainants’ Case

The documentation furnished to this office by the Complainants indicates that in June 2005,

the Complainants invested in a geared investment with a life assurance Provider (the “2005

bond”). The Provider, against which this complaint is made was the intermediary. The

Complainants explain that in 2006, they purchased a similar type financial service product

from another life assurance Provider (the “2006 bond”), again with the Provider, against

which this complaint is made, as intermediary. The Complainant states that both of these

investments were either encashed or matured in 2009 and 2011 respectively.

- 2 -

/Cont’d…

Notwithstanding that any complaint concerning the advice given by the Provider to the

Complainant at the time of the sale of the financial product in 2005 and 2006 may fall

outside the jurisdiction of this office, the Complainant asserts that the Provider mismanaged

the proceeds of the 2006 bond after it matured in 2011.

In its final response letter dated 4 April 2017, the Provider accepts that certain errors arose

in relation to how it dealt with the maturity of that financial services product.

The Complainants argue that they invested €53,000 in June 2006 in a bond which matured

in 2011 and despite numerous enquiries since that date, the Provider has been unable to

categorically state the value of the investment or where the funds were. The Complainants

argue that when an explanation was demanded in December 2016, the Provider informed

them that the bond was encashed in 2014 and was worth approximately €11,000. The

Complainants argue that they have not received any further communication on the

whereabouts or the value of the investment.

The second element of the Complainants’ complaint relates to the winding up of pension

schemes associated with the company of which the Complainants were directors. The

Complainants contend that at the time this took place, between November 2015 and March

2016, they were misled by the Provider regarding the transfer of the funds derived from

their occupational pension schemes to retirement bonds. They say that they proceeded with

the transfer of the funds to retirement bonds on the basis that there would be a 100%

allocation of funds. They argue that the Provider did not make them aware of the costs and

charges associated with the transfer. The Complainants argue that the advice they received

was misleading and not in their best interests.

The Complainants argue that in November 2015, the Provider suggested that the pension

funds associated with the company be wound up and transferred into retirement bonds.

The Complainants argue that the Provider indicated that the advantages of this would be

100% allocation, lower management charges, and savings between 0.25% and 0.5% per

annum. The Complainants argue that at the same presentation, the Provider informed them

that the value of the policies was €353,128.37. Based on the information, the Complainants

argue that they instructed the Provider to proceed with the transfer to retirement bonds in

anticipation that the sum of money would be 100% allocated to the retirement bonds. The

Complainants argue that at no stage did the Provider mention or discuss early encashment

charges related to these policies. The Complainants argue that at the next review of the

policy in October 2016, it came as quite a shock to discover that the amount of money

transferred to the retirement bonds was €272,389.29. This represented a difference of

€80,739.08. The Complainants accept that the original policies dipped in value between

November 2015 and March 2016, but the Complainants state that they felt misled by the

financial advice they received and feel that the recommendations were not in their best

interests.