• The Claims Bureau

Adviser to Pay Out Compensation After Failed Annuity Advice


The Financial Ombudsman Service has ordered Romilly Associates IFA to compensate a client after they failed to give all the relevant information when purchasing an annuity which resulted in the client’s beneficiary missing out on more than £24,000 in payments.


The beneficiary who FOS identify as Mrs G, complained about Romilly Associates after her late husband was advised to buy an annuity with a five-year guarantee period, which she argued he should have taken a ten-year guarantee.


Mr G was approaching 60, and his pension plan had a fund value of £68,000 and told his adviser, he wanted to maximise his income by not taking the tax-free cash available. Mr. G was then recommended to take an enhanced five-year guaranteed annuity due to his ill health, to provide some protection until he received his state pension plus also having further income as he had another pension plan.


Mr. G’s annual income from the annuity as £4,891.08 from June 2012 being the income was based on a single life plan and payable monthly in advance for a minimum of five years. Unfortunately, Mr. G passed away in 2015 and income payments stopped in 2017 due to the five-year guarantee period.


Mrs. G complained to Romilly saying the advice given to her late husband was unsuitable and a ten-year guarantee would have been better suited to his circumstances. Romilly rejected the complaint saying the five-year product matched Mr. G’s objectives to maximise income and all other options had been reviewed, additionally Mrs. G was not their client.


An FOS adjudicator accepted that the inclusion of the spouse’s pension within the annuity would have significantly reduced the annuity income and although Romilly were not wrong to discount this option, no evidence was found to quantify the ten-year guarantee annuity and not presented to Mr. G to make a fully informed decision.


Ombudsmen Keith Taylor, said while the ten-year guarantee was more expensive, the difference was small and there would have been more benefits of taking a reduced income and would have gained five years payments equating to £24,000. Romilly’s adviser should have recognised this value in the annuity comparisons and recommended this to Mr. G.


Romilly was ordered to put Mrs. G in the position she would be in if the unsuitable advice was not given, comparing actual income from the five-year annuity and any gain which would have been received if Mr. G had gone for a ten-year annuity plus £250 to reflect the distress and upset caused by the lack of income.


If you have been affected by Annuity services offered by Romilly Associates IFA and would like to discuss how we may be able to help give us a call on 01903 868251.


Information in this article was sourced from

https://www.ftadviser.com/pensions/2020/04/15/adviser-held-to-account-after-annuity-advice-failure/

Authorised & Regulated by the Financial Conduct Authority: www.fca.org.uk/register/

Reference Number: 830392

Registered in England - Company No. 08075880. VAT registration no: 188 6596 35.



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