Clydesdale Bank has been ordered to compensate a client for unsuitable investment advice given in 1998, despite arguing the complaint had been made to the Financial Ombudsman Service outside the permitted time limits.
In a decision upheld in March, the ombudsman found the client was unsuitably advised to invest too many of her savings into products it deemed to be riskier than necessary.
The client was 66 years old when she first received advice from the bank, and the ombudsman heard she had run a “small” market stall with her husband until his death the previous year.
Following the death of her husband in 1996 the client retired, passing the stall to relatives, and her representative claimed she had a maximum of £25,000 in savings and received a basic state pension.
In 1997 Clydesdale advised the client to invest £6,000 in the MLC Conservative Portfolio, with a further top-up of £6,000 in 1998, and £5,000 in the MLC UK Equity Fund Unit Trust in 1998.
Whilst the ombudsman was satisfied the Conservative Portfolio was suitably low risk, it found the Equity Fund “posed more of a risk to the client’s money than she should have been advised to take”.
Despite evidence suggesting investments in the client’s name had existed prior to the advice, the ombudsman heard the client’s late husband had dealt with such matters and this therefore did not necessarily reflect her understanding of risk.