The adviser went on holidays
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After meeting with her accountant Ms D decided to withdraw $300,000 from her investments to put into an annuity. Ms D expected to begin receiving payments from the annuity in early January 2006.
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Following a meeting with her financial adviser, the adviser withdrew $300,000 from her investments on 9 December 2005 and deposited it into her passbook account. The funds were withdrawn on 21 December 2005 for the purposes of investing in the annuity.
Ms D went through the annuity documents with her adviser, signed the necessary documentation and provided the adviser with her tax file number.
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No pension payment is made
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When there were no payments in January 2006 Ms D called the bank only to find that the adviser she had been dealing with was on holidays. Another financial planner at the bank found that the annuity had not been established and that Ms D’s money had not been earning any interest.
Ms D had not realised that she was required to provide a certified copy of her birth certificate for the purpose of establishing the annuity. The adviser was not aware that the birth certificate was required and was informed by email while he was on holidays. He did not advise Ms D to supply a copy of her birth certificate until he returned from holidays on 23 January 2006.
Following these events, Ms D changed her mind about depositing her money into the annuity.
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The bank’s initial offer
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The bank offered to pay Ms D $1,355.24 which represented 33 days interest at a standard rate of five per cent. This calculation represented the number of days from the date the funds were withdrawn from Ms D’s passbook account until 23 January 2006 when the adviser told Mrs D about the birth certificate.
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Ms D complains to BFSO
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Ms D complained that her money should not have been withdrawn from her investments until the annuity was set up. She said that if the financial adviser had waited until all the requirements to establish the annuity were met she would still have been earning interest at the rate of her investment, 6.1 per cent. On this basis she said that the compensation offered by the bank was inadequate.
Following referral by BFSO, the bank reviewed its offer. It offered to pay Ms D interest for the whole period, from the date of withdrawal from her investment until it was returned to her bank account at the rate applicable to her original investments. The bank also offered to refund $500 representing the fee Ms D had paid to the bank’s adviser.
In total, the offer was approximately $3,278. Ms D accepted the offer and BFSO closed its file.
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