A couple faced distress after advice to remortgage their home for a high-risk investment caused financial hardship and health issues.
What happened
Andrew and Yvonne were retired and had paid off their mortgage.
They wanted more disposable income to help them enjoy their retirement and to help pay medical bills for existing conditions.
They went to a financial adviser who recommended they re-mortgage their home and invest the money in a high-risk unregulated collective investment scheme. The adviser said this investment would regularly pay out enough to cover their mortgage payments and also provide additional income they could use.
However, within a year, the investment stopped paying any income. Andrew and Yvonne struggled to meet their mortgage repayments and medical bills. This continued for almost two years, up to the point that their mortgage provider started repossession proceedings.
Andrew and Yvonne were devastated and complained to the financial adviser. They provided medical evidence to show that Andrew had had a breakdown as his health worsened. He’d previously been receiving treatment privately for a long-term condition but had stopped this once he could no longer afford payments. Waiting for treatment, he’d been in pain for several months.
Yvonne was forced to start work again as she was so worried about not having enough money to pay the mortgage. This was very upsetting as she was expecting to enjoy her retirement and have a slower pace of life.
What we said
We didn’t think the investment advice recommended for Andrew and Yvonne was suitable for their circumstances. They should never have been advised to remortgage in the first place. We upheld their complaint and asked the financial advice firm to put Andrew and Yvonne back in the position they’d have been in had they not been sold the investment. This included unwinding the mortgage as if it had never existed.
Andrew and Yvonne had experienced extreme distress. They’d owned their property and been living comfortably, but now they feared they’d lose their home and were worried about their medical bills.
We believed the business’s mistake had seriously impacted Andrew and Yvonne’s daily life and wellbeing over several years. We expected Andrew’s health would continue to suffer for some time to come. Therefore, we felt that £4,000 was fair compensation for Andrew and Yvonne in the circumstances.