Couple complain about advice received over investment bond

Investments Distress and inconvenience Up to £750

Frank and Laura were planning for their financial future, and sought advice that would lessen their tax liability. They came to us because they felt the advice they'd been given wasn't right and caused a lot of unneeded stress.

What happened

Frank and Laura were unhappy with advice they’d been given to surrender their existing jointly held investment bond and each reinvest into separate new bonds within a trust. They thought the advice they’d received had not met their aim of reducing their future potential tax liability, as their bonds were set up to pay each other an income. The money invested was a significant proportion of their life savings.

It was very important to Frank and Laura to limit any tax their children may need to pay on their inheritance. Their concerns about the advice caused them a lot of worry as it was meant to help them secure their finances for the future and they were worried this was not the case. They said the worry had caused stress to their relationship. The business looked into their concerns but thought the advice was suitable.  

What we said

We thought the advice wasn’t suitable. We proposed a remedy to put Laura and Frank back in the position they would have been in but for the unsuitable advice and also told the business to cover any potential tax liability due to the advice. We told the business to pay towards further financial advice Frank and Laura would need in order to consider their tax position now.

We recognised the unsuitable advice had a serious impact on Frank and Laura. Their financial planning was very important to them and the errors caused them a considerable amount of distress and worry for a few months, before we could investigate and recommend how things were put right. A significant amount of money was involved, and they were worried about their children losing out. We also acknowledged the impact the poor advice had on their relationship, causing additional stress to their family life. It also caused them inconvenience as they would need to undergo further tax planning advice to make sure their life savings were invested how they wanted. To recognise the impact of the mistakes made by the business we awarded £500 compensation.