Frank and Laura’s plans were disrupted after advice to restructure their investment bonds failed to meet their goal of reducing future tax liabilities.
What happened
Looking to strengthen their financial future and minimise inheritance taxes for their children, Frank and Laura got some financial advice.
Their independent financial adviser told them to give up their existing joint investment bond and each reinvest into separate new individual bonds within a trust.
Frank and Laura weren’t happy because they didn’t think the advice had met their goal of reducing their future potential taxes. Their bonds were set up to pay each other an income, and the money invested was a significant portion of their life savings.
But they became increasingly concerned the advice did not protect their children’s inheritance. This caused them a lot of worry and added significant stress within their relationship. Although the advice firm looked into their concerns, it maintained the advice they had given was suitable.
Unhappy with that response, they brought their complaint to us.
What we said
After reviewing all the evidence, we concluded the advice Frank and Laura had received was not suitable. We upheld their complaint and instructed the business to restore them to the financial position they would have been in had they not followed the advice. This included covering any additional taxes incurred.
We also told the business to fund new financial advice so Frank and Laura could reassess their tax and inheritance planning.
We understood that the unsuitable advice had a huge impact on the couple, causing months of distress, worry, and tension in their family life. The stress of managing their life savings and fears of jeopardising their children’s inheritance weighed heavily on them. On top of that, the need for further tax planning added significant inconvenience.
To acknowledge the distress and disruption caused, we instructed the business to pay Frank and Laura £500 in compensation.