The Financial Ombudsman Service (FOS) ruled that Turnberry Wealth Management had sold unregulated investment schemes which were unsuitable for clients in four separate cases.
But clients now have to make a separate application to the FSCS to try to get compensation after Turnberry went into liquidation at the end of last month. This means those clients with investments in excess of the FSCS’s £50,000 limit will lose money.
Regulatory Legal Solicitors, which represents one of Turnberry’s clients, said it suspects there are other people who have been mis-sold investments by the wealth manager. The firm also said it will review customers’ files for free in order to assess whether they have a case for compensation.
“Jeopardised”
In one case, “Ms A” had said that she was not prepared to take any risk with her capital and was assured by Turnberry that the investments into unregulated collective investment schemes (UCIS) were risk free. She invested £80,000 which she subsequently lost.
Jeopardised her short term and long term financial security
In another case Turnberry had inaccurately reported a client’s circumstances, stating that “Ms C’s” annual income was £30,000 when the FOS said it was nearer half that figure.
“She was led to believe that her UCIS investments would generate an income for her and that she felt she was too old to take on the level of risk they carried,” said the Ombudsman. The body therefore ruled that the high risk investments Turnberry recommended jeopardised her short term and long term financial security, particularly as she was looking to retire and only had the state pension to fall back on.
“Sufficient information”
The FOS ruled that Turnberry had not carried out due diligence on one client, and said sufficient information had been gathered to know that “Mr K” had limited liquid assets, a number of existing unregulated investments, a mortgage and two dependent children.
“Put simply, Turnberry had sufficient information to conclude that Mr K should not place £15,000 into high risk unregulated investments that may not offer him any return of capital or tax benefit,” it said.
In another case, Turnberry had wrongly treated a high net worth client as a sophisticated investor, which the Ombudsman said was not a reasonable conclusion as “Mr J” was not adequately aware of the risks involved.
Regulatory Legal is currently helping clients through the FSCS application process.
