You are here: Home - Investing -

FOS rules Chase de Vere wrong to put 65% of client’s SIPP in UCIS

Written by:
The Financial Ombudsman Service (FOS) has ruled national adviser Chase de Vere gave unsuitable advice when it recommended a client put most of his pension in high risk unregulated schemes just six years before he retired.

Mr H invested £145,000 across three unregulated collective investment schemes (UCIS) – £100,000 in Premier Diversified Property, £15,000 in Premier Property Options and £30,000 in Matrix Bastion – in 2007, on the advice of his adviser.

Chase de Vere had judged him to have an attitude to risk of six out of 10, or “more than moderate”.

All three funds have run into trouble since then.

Redemptions from Premier Diversified Property and Matrix Bastion were suspended in 2008.

The Premier Property Options fund was suspended in 2012.

Mr H contacted Chase de Vere in 2012 to complain that he felt the advice given to him was negligent.

He argued the assessment of his risk profile was inadequate, that the adviser had failed to diversify his advice, and that he had not acted within the regulator’s rules around recommending UCIS.

Chase de Vere fought the claim, saying that Mr H had appropriate investment experience – having worked in financial services -, that the investment brochure explained the risk involved, and the poor fund performance did not mean the advice was unsuitable.

The FOS disagreed, with both an adjudicator and finally an ombudsman ruling that Chase de Vere had exposed Mr H to an “unnecessary level of risk”, particularly given he was just six years from retirement when the investments were made.

It said that Chase de Vere should not have even marketed such investments to Mr H, which are considered by the regulator to be unsuitable for the general public.

At 65 per cent, the overall weighting of high risk investments within Mr H’s SIPP was “inappropriate” and in itself a justification to uphold the complaint, regardless of Mr H’s investment experience, it added.

The regulator recommended in 2010 that good practice is to invest no more than 5 per cent of a portfolio in UCIS-style investments.

Chase de Vere must now put Mr H back in the position he had not followed the adviser’s advice, plus 8% simple interest.

The national must also pay £200 for the distress and inconvenience it has caused.

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

How to get 7% interest without tying up your savings for years

You don't have to lock your money away for years to get above-average returns on your savings.
How to get 7% interest without tying up your savings for years

Find the best savings rates this week with fixed rate bonds paying up to 4.56%

With several increases in the base rate over the past few months – and no savings accounts beating inflation –...
Find the best savings rates this week with fixed rate bonds paying up to 4.56%

Evri ranked worst parcel company by thousands of users

The company which rebranded from Hermes last year, was voted the worst delivery firm in a poll of users.
Evri ranked worst parcel company by thousands of users

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Money Tips of the Week