Am I right in thinking that consumers who buy a financial product on an ‘execution-only’ basis (without receiving any advice) have no recourse to the ombudsman service if they later have a complaint?

No this is not the case. We would be unlikely to uphold any complaint about the suitability of the product if the consumer bought it without receiving any advice. However – we could still look into the complaint if it related to misrepresentation, maladministration etc.

Do the articles in ombudsman news all reflect new policy? If so, you seem to change your approach very frequently on a number of fronts.

It’s certainly not the case that the decisions and commentary we publish represent brand-new policy. Much of what we publish explains and illustrates existing – and very well-established – practice. This is because many readers tell us they are just as interested in how we deal with the more ‘everyday’ type of cases as they are in some of the newer, more unusual or complicated subjects.

And we sometimes re-visit a topic we have featured before. Newer readers – or those new to the industry – may not have seen earlier editions, while other readers tell us it would be helpful to have a ‘refresher’. We’re always keen to receive feedback from our readers, so please let us know if there are any particular topics you’d like us to cover.

In deciding a complaint in favour of my client, the ombudsman has made an award expressed as a formula. It talks about:

‘A: The original capital invested, less any amounts paid out by way of withdrawals, distributions of capital or before-tax income’.

I understand that this is what my client invested – less what she has taken out.

Added to this is:

‘B: A return on the amount from time to time of A by way of growth equivalent to 1% more than Bank of England repo rate (‘base rate’)’ which is the investment return that you are awarding. But I’m unsure what ‘from time to time’ means.

The expression ‘from time to time’ refers to the amount actually in the investment ‘pot’ at any one time. So you start off by calculating the investment return awarded on the full sum originally invested. Each time your client made a subsequent withdrawal, the amount left in the investment decreased. So you calculate the investment return on the lesser sum that was in the ‘pot’ at that time.

What you cannot do is simply add up all the withdrawals and deduct them from the capital invested before you calculate the investment return. The calculation should be compound. You will end up with the figure from which you deduct the surrender or maturity value of the policy.