The Financial Ombudsman Service has upheld a decision against Quilter Financial Services after finding one of its appointed representatives gave unsuitable advice.
The complainant, identified as Mrs B, recounted that, in 2021, she wanted financial advice to assist with her objective of reinvesting the money from her stakeholder pension to provide a return for her retirement.
Consequently, she arranged to meet with an adviser from a business which was an AR of Quilter on July 5 2021.
The AR, which is now no longer under the Quilter network, said that Mrs B completed an investment risk profiling questionnaire which specifically considered her attitude and approach to investment risk.
The answers Mrs B provided led to the adviser assessing that Mrs B’s attitude to risk was “moderate”, but Mrs B said that she’d told the adviser that she couldn’t afford to lose money.
Mrs B agreed to proceed with advice on July 14 2021 and her pension was transferred from her previous provider to Quilter on October 4 of the same year.
She then stated that, after the first year, her fund value had reduced by almost £10,000 and, when she brought this up at her first review with her adviser, the adviser said this was to be expected.
The ombudsman pointed out that Mrs B’s original adviser had left the AR in August 2022 and so it had appointed a new adviser for her, who contacted her on December 5 2022.
This new adviser conducted a further ATR assessment, which led to Mrs B’s ATR remaining unchanged.
The new adviser recommended that Mrs B change pension investments to a different balanced fund.
This adviser carried out an annual review for Mrs B on October 3 where she expressed her concern about the performance of her funds and stated that she felt the initial adviser had told her that her pot should grow.
She also said that the negative side effects of investing hadn’t been sufficiently explained and, consequently, Quilter's AR raised a complaint on Mrs B’s behalf.
The AR issued its final response to the complaint on November 9 2023 finding that it didn’t do anything wrong.
However, Mrs B wasn’t happy with the AR’s response and so brought her complaint to the Financial Ombudsman Service.
Decision
The ombudsman decided to uphold Mrs B’s complaint due to her misclassification as a moderate investor.
It stated that, while Quilter's AR maintained that it was “correct” to assess Mr B as a moderate investor, and then to make recommendations in line with that assessment, the ombudsman said they were “not persuaded” this was a fair assessment.
They explained that, although Mrs B did agree to a couple of the more risk-seeking questions she was asked, her answers to the remaining questions didn’t show that she was particularly comfortable with investments.
Therefore, the first adviser should’ve further investigated Mrs B’s responses to the ATR questionnaire before determining whether she was a moderate or balanced investor.
