Financial Administration Services Limited · DRN-5978807

The complaint Mr and Mrs A and their two children Mr A2 and Miss A2 have complained about the handling of a reassignment of an investment bond by Financial Administration Services Limited (Fidelity). What happened Mr and Mrs A took out an investment bond which was provided by a business which I will refer to as ‘provider S’. The servicing of these bonds for customers and their financial advisers was carried out by Fidelity. In 2014 having received input from their financial adviser relating to inheritance tax, Mr and Mrs A decided to assign their bond to their children, Mr A2 and Miss A2. They used a bare gift trust with the intention being that the bond proceeds would be exempt from inheritance tax as long as they lived for seven years after gifting it under the Potentially Exempt Transfer (‘PET’) provisions. Mr and Mrs A forwarded the trust deed to Fidelity which showed Mr A2 and Miss A2 as the trustees and beneficiaries of the trust. Fidelity issued a letter to Mr and Mrs A’s financial adviser in May 2014 confirming that it had processed the assignment, and it noted the new owners of the bond as Mr A, Mrs A, Mr A2 and Miss A2. In 2025, as part of a change relating to the way in which these particular investments were administered, the servicing of the bond was transferred to provider S. Mr A started to receive letters from provider S about the bond. He asked why these were not being sent to his children, as he understood that the policy had been reassigned. Provider S responded that Fidelity had not given it any notice of an assignment. In February 2025 Mr A complained to Fidelity that provider S had no record of the assignment, pointing out that he held correspondence from 2014 where Fidelity had returned the trust deed to him. He said that because the assignment had not been correctly recorded on the bond, this had denied Mr A2 and Miss A2 the opportunity to withdraw funds from it. Fidelity provided its response on 7 May 2025. It stated that it had processed a reassignment of the bond in 2014. However it could not locate a copy of the trust deed, or find evidence that it had ever sent this on to provider S. Fidelity confirmed that if the original deed was forwarded to provider S, provider S would apply the reassignment from its original date in 2014. Fidelity did not consider there was evidence showing that Mr A2 or Miss A2 had had any intention to withdraw money from the bond. It accepted that it had been at fault for the incorrect processing of the assignment and offered £250 compensation to reflect the difficulties it had caused. Dissatisfied with Fidelity’s response, a complaint was referred to this service. Mr A commented that the assignment of the bond formed an integral part of his and Mrs A’s financial planning. He said it was shocking that Fidelity had not retained a copy of the trust deed, and not forwarded it to provider S. Mr A raised concerns about how he could now safely get the trust deed to provider S.

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Mr A said that Fidelity’s loss of the trust deed could have had a huge impact on his and his wife’s tax planning, highlighting that the bond was now worth close to one million pounds. He said that he and Mrs A had suffered sleepless nights due to their concerns about the inheritance tax situation, and he’d had to spend significant time and effort trying to resolve this matter with both Fidelity and provider S. Mr A highlighted that Mr A2 and Miss A2 had received no information about the bond since the reassignment was supposed to have taken place in 2014 and had therefore had no opportunity to have any input about the investments contained in it. Further to this, he commented that no one had been assessing the investments held in the bond since 2014. He explained that he did not consider any of the owners of the bond had been sufficiently compensated for the error Fidelity had made. Our investigator noted that provider S had said that upon receipt of the trust deed, its records would show the date of assignment as being the date the trust deed showed it was made in 2014. Her view was that this would ensure the gift of the bond would satisfy the seven year rule for a PET. In terms of Mr A2 and Miss A2 not receiving correspondence about the bond because of Fidelity’s failure to record the trust deed, the investigator said that even if this error had not occurred, Mr A would still have received all updates relating to the bond because he was shown as the ‘primary policyholder’. She also commented that there wasn’t evidence indicating that Mr A2 and Miss A2 had been looking to manage the bond, or withdraw funds from it. The investigator’s conclusion on balance was that Fidelity’s error had not caused any financial loss in relation to the value of the bond. In terms of Mr A’s concerns about sending in the original trust deed to register it on the bond, the investigator explained that provider S had confirmed that it could accept an ink certified copy. Although she acknowledged the difficulties Mr and Mrs A had experienced as a result of Fidelity’s actions, the investigator’s view was that the £250 compensation offered in respect of this was fair. However she considered that Mr A2 and Miss A2 had also been caused inconvenience due to the paperwork they would need to complete to ensure the reassignment of the bond took place. She recommended that Mr A2 and Miss A2 should each be paid £50 by Fidelity to reflect the problems they’d been caused. Fidelity accepted the investigator’s findings. Mr A asked for confirmation about what certification of the trust deed would be acceptable to provider S. The investigator contacted provider S who confirmed that it would accept a copy of the trust deed signed and stamped by Mr and Mrs A’s financial adviser. In terms of the investigator’s assessment, Mr A commented that he did not feel it sufficiently reflected the mistakes made by Fidelity. He said that Fidelity had very poorly handled a sensitive document for his family with respect to the trust deed. Mr A said he’d had significant dialogue with both Fidelity and provider S and that neither made it easy to progress matters. He reported that the businesses had blamed each other, and the contact he’d had took up considerable time. Mr A questioned how it was possible for a business to lose an important document like a trust deed, and pointed out that the deed had been completed to avoid a substantial tax charge. That being the case, he felt a compensation amount of £250 did not reflect the difficulties he’d encountered resolving matters with both Fidelity and provider S. Mr A said that he found the service he’d received from Fidelity to be shocking when taking into account the charges for administration that Fidelity had applied under the bond. He asked that this complaint be passed for review by an ombudsman.

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What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. It is accepted by Fidelity that it made an error in 2014 when it was provided with the bare gift trust that had been put in place for Mr and Mrs A’s investment bond. Despite issuing a letter in May 2014 that said the trust deed had been processed for the policy, it failed to inform provider S about this. It seems that Fidelity also failed to keep any record of the trust deed, or amend the bond’s records to reflect the deed’s existence. In the circumstances I need to consider what actions should be taken to rectify Fidelity’s mistakes in this matter. Provider S has confirmed that upon receipt of the trust deed, it will ensure that the policy record reflects that the deed was arranged in 2014. This should ensure that Mr and Mrs A, and Mr A2 and Miss A2 as both trustees and beneficiaries, are not disadvantaged by the delay in the deed being recorded on the policy. Provider S has also explained in what format a copy of the deed is acceptable to it. This complaint is not about provider S, and so I am not able to comment about its actions. However on balance I am satisfied that provider S’s confirmation that it will show the date of assignment as being 2014 once it receives an appropriate copy of the trust deed should ensure that the complainants have not been disadvantaged by Fidelity’s error in failing to correctly record the deed on the bond’s record in 2014. With regard to Mr A2 and Miss A2 not receiving any information about the bond from the time the trust deed was arranged in 2014, like the investigator, it does not seem to me that this has caused a financial loss. I say that because it has not been demonstrated that either Mr A2 or Miss A2 was seeking to withdraw funds from the bond during the period when the trust deed was not correctly showing on the bond’s records. And whilst I note what Mr A has said about Mr A2 and Miss A2 not questioning why they’d not received any information about the bond as they thought their parent’s decision to reassign it may have changed, I’m not persuaded it’s been shown that the bond would have been invested differently if Mr A2 and Miss A2 had been sent updates about it. Overall I don’t consider the weight of evidence indicates Fidelity’s error did cause a financial loss. In terms of the difficulties Mr A has encountered trying to rectify Fidelity’s error, it is clear that he has been put to significant inconvenience in his contact with both Fidelity and provider S. I should clarify again that under this complaint, I am only able to assess the problems that have been caused by Fidelity – although I appreciate that the contact Mr A has had with provider S is the result of the initial mistake made by Fidelity. Mr A has explained that he and Mrs A were caused unnecessary concern about their inheritance tax planning when they discovered the trust deed had not been recorded for the bond. Mr A has also described the length of time it’s taken to resolve matters. I also acknowledge what he’s said about the importance of businesses ensuring they safely retain their copies of documents with legal standing such as trust deeds that they’re provided with. I accept that Mr and Mrs A have been caused worry that would not have been experienced if Fidelity had dealt with the trust deed in the way that it should have done when first received in 2014. I can also see that to correct the bond’s records has taken time and effort on Mr A’s part. However, having considered the difficulties that Fidelity has caused through its error, and taking into account awards made by this service on complaints with similar circumstances, my view is that the offer of compensation made to Mr and Mrs A of £250 is appropriate.

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The investigator also highlighted the inconvenience that Mr A2 and Miss A2 are being caused by needing to complete further documents to ensure the trust deed is recorded under the bond. I would agree that it is fair that they each receive £50 compensation to reflect this. I appreciate that Mr A may be disappointed with my findings, and I acknowledge what he says about the actions he’s been forced to take in order to resolve this matter. However overall I consider that a total compensation amount of £350, as I’ve detailed above, is fair when taking into account the events that have occurred. My final decision My final decision is that I uphold this complaint. I understand that Financial Administration Services Limited has already paid the £250 compensation it offered to Mr and Mrs A. I now require Financial Administration Services Limited to make compensation payments of £50 each to Mr A2 and Miss A2. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr A, Mrs A, Mr A2 and Miss A2 to accept or reject my decision before 16 April 2026. John Swain Ombudsman

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