The Financial Ombudsman Service has found in favour of a bank client who complained about advice to invest in investments from failed provider AIG.
In a provisional decision published by the Ombudsman, it found in favour of the unnamed clients, who invested £3.2 million in the AIG Enhanced fund and later argued the investment did not match their risk appetite.
Chief ombudsman Tony Boorman said: ‘In respect of Mr and Mrs V’s investment objectives at the time… the primary objective was for short term reasonable return but secure cash investment. They did not wish to take risks with this money. In simple terms they were ‘no risk’ customers – not ‘low risk’.’
‘To an experienced financial adviser and to a business like Bank D, these investments would not – and should not – have appeared to represent a risk-free approach, nor would they have been suitable for investors looking to invest in cash, or for investors looking for instant access who were not prepared to accept the possibility that they might have to wait to access their money.’
‘It was important for advisers to take these things into account when assessing the suitability of the product for an individual investor, and for potential investors to understand that the fund presented more risk than an ordinary cash fund. And Bank D should have identified those risks and taken them into consideration when recommending the investment to Mr and Mrs V.’
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