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Couple reject Coutts redress after suitability review

Couple reject Coutts redress after suitability review

A couple has rejected redress offered by Coutts following its suitability review in a case that was taken to the Financial Ombudsman Service (FOS).

Documents seen by Wealth Manager also confirmed that the regulator appointed a skilled person, also known as a Section 166 order, to approve the compensation process.

Last month it was revealed that Coutts completed its suitability review, which started in 2014, in December 2016, with total costs, including client compensation, coming within the £200 million provision that was set aside.

However, the claimants, who have been referred to as Mr and Mrs B, have declined the £4,651.91 in compensation they were offered by Coutts claiming that it was based on the wrong benchmark, even though it was approved by the skilled person.

Wealth Manager understands that this is an isolated case and should not have wider implications for the bank.

The couple had around £500,000 invested with Coutts between 2006 and 2012. Based on Coutts’ advice, they were invested in its in-house Orbita Global Opportunities fund, which was wrapped within an offshore investment bond.

Mr and Mrs B’s investment was looked at as part of the past business review, during which time the bank said it could not show that the fund was suitable for them.

FOS has upheld the couple’s complaint and ordered Coutts to pay £150 for the trouble and upset the issue has caused them.

The ombudsman also said that the investments of Mr and Mrs B should be compared to the FTSE WMA Stock Market Total Return index and Coutts should pay the difference between the fair value and the actual value of the two.

The document said: ‘In Mr and Mrs B’s case, I have seen no evidence that the portfolios Coutts used as benchmarks were viable alternatives for them at the time of their investment.

‘I also note that Coutts presented itself as a “whole of market” adviser, which suggests that the alternatives available to Mr and Mrs B at the time were market wide.’

The ombudsman also instructed Coutts to pay interest of 8% simple per year on the award from the end date to the date of settlement.

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