DRN-6021026

The complaint Mrs T complains that she was incorrectly advised by Chase de Vere Independent Financial Advisers Limited (‘CdV’). She says the business prematurely encashed a bond ready to reinvest in another financial product before eligibility was confirmed. What happened In 2024, Mrs T received financial advice from CdV. Following a review of her personal circumstances and objectives, she was advised to apply for a Discounted Gift Scheme (‘DGS’) through an underwriter (‘Company A’). The DGS would have allowed Mrs T to put some of her wealth into a trust, so a portion is treated as leaving her estate straight away, and the rest hopefully after seven years. It would also allow Mrs T to take an income from the trust. Mrs T applied to put £120,000 into a DGS with Company A. Prior to receiving advice about this product from CdV, Mrs T held this money in a bond with a different company (‘Company P’). Mrs T drew a regular income from that bond. Mrs T’s application with Company A for a DGS was declined, and CdV were updated about this decision in March 2025. Company A advised the only product it could offer Mrs T was a standard trust which would be exempt from inheritance tax after seven years. Mrs T complained to CdV about the business’ decision to encash her bond with Company P prematurely. She says she was left without her regular income and without being in the market for around eight months because the bond was cashed when no decision had been made regarding her application for a DGS. CdV investigated and responded to Mrs T’s complaint. The business didn’t accept any responsibility for the delay in the application process of the DGS, or the loss of income claimed by Mrs T for this period. The business explained that, as per the suitability report it sent to Mrs T, CdV is not responsible for delays caused by third parties. CdV also said that Mrs T didn’t disclose all medical history within her application form. And had she done so, the business wouldn’t have advised Mrs T to encash her bond in July 2024. CdV did, however, offer a financial remedy of £250. This was for any distress and inconvenience caused to Mrs T because of a lack of response from the business during the underwriting process. Mrs T was unhappy with this reply, so escalated her complaint to our service. An investigator looked into the complaint and found the CdV hadn’t acted fairly. In summary, the investigator’s view explained: - CdV did provide clear instruction to Mrs T to encash her bond in July 2024 - CdV had sufficient information about Mrs T’s medical history to foresee that

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additional underwriting would likely have been required - CdV are not responsible for third party delays, which in this case was primarily caused by the time taken for Company A to receive sufficient information from Mrs T’s GP. However, CdV shouldn’t have advised Mrs T to encash her bond with Company P before Company A had confirmed her eligibility for the DGS. Because our investigator was of the view that CdV could have reasonably foreseen the need for further underwriting, and that Mrs T’s money was left uninvested for an extended period of time, CdV needed to do more to put the situation right for Mrs T. Our investigator recommended CdV look at Mrs T’s bond with Company P and: - Calculate how many units would have remained after each income payment based on the unit price at the time - Calculate what the remaining units would have been worth had they remained invested - Add the monetary value of the income payments back to work out the total amount Mrs T would have received over the period her money wasn’t invested. - If this is more than the amount Mrs T did receive from the sale of her bond, CdV should pay the difference to Mrs T plus 8% interest from the date Mrs T submitted her application for her new investment until the date of settlement. Our investigator also said that CdV should still pay Mrs T the £250 offered previously for the distress and inconvenience she has been caused, as this is a reasonable remedy to reflect the impact this situation has caused her. CdV rejected our investigator’s view. The business said that had Mrs T’s form been completed correctly then encashment of her bond would have been delayed until assessments had been finalised. CdV also said that the business cannot be held responsible when funds are out of the market and there may be a lost period of growth (as per the terms Mrs T agreed to). Mrs T accepted our investigator’s view. She maintains that CdV should not have encashed her bond until the business was absolutely sure Company A were ready to go ahead with the DGS. Our investigator responded to CdV and explained that she accepts Mrs T did not disclose all her medical history within the health questionnaire. However, sufficient information was disclosed that CdV should have reasonably known that Company A would request a GP report. And because further underwriting was more than likely, CdV should not have recommended Mrs T encash her bond in July 2024. Our investigator also commented that she couldn’t see CdV had completed any pre-underwriting checks when these should have been done. CdV maintained its view that it is not responsible for Mrs T’s claimed losses. And as no agreement could be reached, the complaint was passed to an Ombudsman for a final decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable

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in the circumstances of this complaint. I have summarised this complaint and what has happened linking back to the crux of what Mrs T says went wrong. The purpose of my decision isn’t to address every single point raised by all of the parties involved. If there’s something I’ve not mentioned, it isn’t because I’ve ignored it - I haven’t. I’m satisfied that I don’t need to comment on every individual argument to be able to reach what I think is the right outcome. No discourtesy is intended by this; our rules allow me to do this, and it simply reflects the informal nature of our service. Instead, I will focus on what I find to be the key issues and evidence relevant to this complaint. Having considered all the facts and information in this case, I agree with my investigator colleague’s view. I will outline why I agree within this decision and refer to relevant guidance I have used to help inform my decision. I will focus my consideration on the primary point of complaint here. That is, the decision to encash Mrs T’s bond in July 2024. CdV is firm in their position. Which is, that Mrs T signed and agreed to their terms that the business wouldn’t be responsible for any losses whilst money isn’t invested when third parties cause delays. And that Mrs T didn’t disclose all her medical history on the health questionnaire. As such, the business could not have foreseen the delays Mrs T encountered, or the fact Company A would decline the application. Therefore, the business isn’t responsible for the loss being claimed. Regulator guidance says that a business should avoid causing foreseeable harm to retail customers. This is because a business is responsible for addressing the risk of harm when it is reasonably foreseeable. Whether harm is foreseeable would depend on whether a business acting reasonably would be able to predict the harmful result of their action (or inaction) in connection with a product or service. I believe that CdV ought to have known, with the DGS Mrs T was applying to, that there would likely have been further underwriting necessary. Regulator guidance says that financial businesses need to understand the products they’re selling and carry out their business with due skill, care and diligence. Even if some medical information was absent, Mrs T’s age (nearing the limit of being eligible to take part in this type of scheme) coupled with her past health disclosed on the medical questionnaire should have indicated that more information would likely have been requested by Company A for the type of product being recommended (a DGS) and this would have taken some time to process. I’ve looked at the underwriting form for Company A, which Mrs T used when she applied for the DGS. This form talks about what sort of medical information a doctor may provide about an applicant if further information is requested. This includes: - “Your current health including any care, medication or treatment you are currently receiving…” - …Your past health including details of any relevant illness, trauma, or referrals for specialist advice or treatment…In particular whether you have a history of… o Any blood pressure reading in the last three years or

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o Any history of disease among your parents or brothers or sisters that you have told your doctor about.” Within the form Mrs T completed, she disclosed that she underwent medical investigations in 2019 and 2023, as well as taking two separate medications for a heart condition and high cholesterol. She also recorded that within her family there is a history of bowel cancer. Reading what Mrs T listed, and what sort of information Company A might ask for, on balance I agree that further medical information would likely have been requested for Mrs T. And that this would have added time to the application process. With this in mind, encashing Mrs T’s bond in July 2024 was an unsuitable recommendation. I accept that the CdV would not have known it would take around eight months for a decision to be reached about Mrs T’s eligibility for the DGS. And I accept that the delays in this application process were because of third parties involved. However, CdV were recommending that Mrs T switch to a product that, more than most investments, was subject to qualifying criteria (i.e. medical underwriting was likely). Ultimately, it was unsuitable advice and poor practice by CdV to encash Mrs T’s bond before knowing Mrs T would be accepted onto the DGS. CdV could have prevented the losses Mrs T incurred (primarily the loss of her monthly income) by advising her to wait until a decision had been reached about the DGS before taking steps to move her money out of her bond. Had this been the advice, then Mrs T would have been able to continue drawing her income from the bond whilst Company A continued its further underwriting process, negating the impact Mrs T is now claiming. To be clear and fair to CdV, the business isn’t required to protect a client from all harm because this is not reasonable or realistic. But I do find that CdV’s advice in July 2024 did cause an avoidable financial impact to Mrs T. I have not seen any good reason why Mrs T’s bond with Company P could not have stayed where it was until eligibility for the DGS was either confirmed or declined. I’ve read through Mrs T’s fact find (which details all relevant information about her financial circumstances and objectives) and it is clear Mrs T had other investments and cash available. So, I’m satisfied Mrs T’s bond didn’t need to be encashed when it was as she had access to other income and money. Mrs T also says in the fact find that she does not want to touch the capital of this investment, and this was what she faced when holding this money in an account awaiting a decision on the DGS, with no interest or growth. It is frustrating for all both parties that the application process took as long as it did, for factors beyond their control. There is also a secondary complaint here about a lack of communication from CdV during the underwriting process. I note CdV’s explanation that their financial advisor was seriously unwell at the time, which is why there were some gaps in communication. I’m sorry to read this happened, and I hope the financial advisor concerned is now in much better health. I’ve not looked at this complaint point in any more detail as the claimed impact stems from the advice about enchasing Mrs T’s bond. I have therefore outlined below how that failing can be adequately remedied. Putting things right I find that CdV provided poor advice to Mrs T, which caused both emotional distress and a financial impact. I am recommending CdV take steps to put this right for Mrs T. The £250 offered by CdV is fair and reasonable to reflect the frustration, upset and distress

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caused to Mrs T during this process, some of which could have been avoided had her bond not been enchased prematurely. As such, CdV should pay this amount to reflect the distress and inconvenience Mrs T was put to. This does not, however, cover the financial loss being claimed by Mrs T, which needs addressing. Mrs T says she was left without her regular income from when CdV enchased her bond (July 2024) until her new financial advisor reinvested her money. It is my decision that this financial loss should be paid by CdV to Mrs T, to put her back in the position she would have been in had her bond not been enchased prematurely. My investigator colleague provided a formula for calculating this financial loss. I’d prefer to calculate this slightly differently, which ultimately ends up in the same place as recommended by my colleague but just in a way that is clear about dates and values that should be applied. It is my decision that CdV should: - Calculate the actual value of Mrs T’s investment at the end date when her money was reinvested (note: actual value is how much Mrs T received for the bond sale as it earned no interest in the interim) - Then calculate the fair value Mrs T would have received for the bond sale had it remained invested (note: fair value should be calculated by working out how much Mrs T’s bond would have grown by from when the bond was sold until the money was reinvested) - When CdV calculate the fair value, the business can make deductions for the regular income payments Mrs T would have received. But it should then add the monetary value of those payments back into the fair value sum at the end as Mrs T didn’t in fact receive that income. - If the fair value is greater than the actual value, then CdV should pay the difference, plus 8% interest from the date the bond was enchased until the date the money was reinvested. CdV will need to follow this formula and must make the payment (together with £250 for distress and inconvenience) to Mrs T within 28 calendar days from the date the business is informed by us of Mrs T’s acceptance of my final decision. If CdV does not pay the compensation by this date, it should pay 8% simple interest for the period following the deadline to the date of settlement. My final decision I uphold Mrs T’s complaint. CdV should pay Mrs T £250 compensation and calculate her financial loss and pay her the difference (plus 8% added interest) using the formula I have outlined within this decision. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs T to accept or reject my decision before 11 May 2026. Emily Bowyer Ombudsman

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