Can an investment company or bank be compelled to do what an executor of a Will has asked them to do? (Assuming it is a reasonable request).
I am administering the estate of the late Mr B, whose Will leaves everything to his spouse, Mrs B. Both the late Mr B and Mrs B were also clients of an IFA practice that we work closely with, PFS, and both had a historic portfolio of ISAs with ABC Bank Ltd (cash ISAs) and their investment arm PLM (stocks and shares ISAs).
Mrs B lacks mental capacity and her daughter, CB, has power of attorney over her property and financial affairs. CB is also a client of PFS and they are advising her on investment and tax planning for her mum in view of the size of the estate that her mum will inherit from her late husband.
In my capacity as Executor, I have asked PLM to transfer the recently introduced ISA Additional Permitted Subscriptions in respect of both of the late Mr B’s ISAs to his spouse, Mrs B, so that the funds from both of his ISAs can be paid into Mrs B’s own PLM stocks and shares ISA.
CB then intends (via advice given through PFS) to move the enlarged ISA fund in question from PLM to another investment provider as an ISA to ISA transfer, where it will be invested into a high income yielding ISA, again held in Mrs B’s name.
The above actions will of course preserve the ISA holdings from the late Mr B’s estate as tax free ISA funds in Mrs B’s name, from which CB can take a tax free income to help pay Mrs B’s care fees.
Only problem is - PLM are refusing to move the APS or release the funds from the late Mr B’s ISAs until the client has had a financial review to “establish whether moving Mr B’s ISA via the APS to Mrs B’s ISA will be what they call ‘suitable’ advice” !
I would have to ask: “When would it ever be suitable advice for a bereaved spouse to NOT inherit her late husband’s ISA funds?” I cannot think of a single situation where a client would be advised “No - you really don’t want to inherit that large tax free ISA fund that your husband built up before he died. I suggest we just let it be encashed so that it falls back into the residue of his estate as fully taxable cash deposits.”
However, that would seem to be irrelevant here, as the real issue is PLM not doing what I have asked them to do.
We have pointed out to PLM that:
(a) The clients (both the late Mr B and Mrs B) have not taken advice from PLM for years (as they are in fact PFS clients) and the late Mr B was unhappy with PLM’s handling of his investments and he was in the process of taking advice to move them away from PLM before his death. Accordingly, Mr and Mrs B had not had any contact let alone a financial review with PLM for many years.
(b) Mrs B now lacks mental capacity and her daughter CB is her Attorney.
© CB has no intention of taking advice from PLM ongoing and all her financial advice will continue to be provided through PFS. CB has stated that she therefore has no intention of having a financial review with PLM at any point.
(d) After all the APS allowances from Mr B have been transferred into Mrs B’s PLM stocks and shares ISA, CB intends to move that enlarged PLM ISA to another investment firm and no other assets will be left with PLM ongoing. A financial review will therefore be a pointless waste of everyone’s time as PLM will not have any funds under management within a very short time anyway.
However, PLM are blindly ignoring my instructions as Executor and doggedly insisting that CB (as Attorney to their ‘client’ Mrs B) must have a face-to-face financial review with a PLM representative before any additional funds are added to Mrs B’s existing ISA investments with PLM. CB is now being badgered on the phone by PLM staff who are trying to get her to agree to a review meeting. She has found that a very distressing experience so soon after losing her father.
I sent a letter of complaint to PLM about their continued failure to act upon my instructions. This week, PLM have sent me a long letter refuting the complaint and quoting their internal rules and procedures on ‘know your client’ and ‘best advice’ and reminding me that they have a statutory duty of care to an existing client under FCA rules, which of course I am familiar with, but which in my opinion, simply do not apply here.
For example: If I had told PLM (in my capacity as the Executor of the estate) that my clients wanted to surrender the deceased’s ISAs, so I was instructing them to do that, and to pay the resulting funds into our client account, surely they would not have said “Well we will have to have a review meeting with Mrs B to see if we think that’s good advice or not”.
As far as I can see, PLM’s internal processes and FCA rules have no bearing here and there is in fact no legal reason why Mrs B or her Attorney have to have a face-to-face review with PLM and PLM are in no position to insist on the family having a financial review.
I thought that the written instructions of an executor were by default, a full legal discharge to the bank or investment company, and that once the funds had been paid away at the Executor’s request, there could be no further claim made against the bank and instead, the Executor would be liable in the event of a claim?
Are PLM in any position to debate or argue my instructions as Executor?
Do they have to do what I have asked them to do?
Can they be compelled to stop messing the family and me around and carry out my instructions?
This is the first time I have ever had a situation where a bank or investment house have simply refused to do what I (in my capacity as Executor) have asked them to do in regard to the distribution of funds as part of the administration of an estate. This matter has been dragging on since last July and it is now preventing me from completing the estate administration.
In all other cases to-date where we have instructed an ISA manager that we wanted to use the deceased’s APS, they have just transferred the funds to us and notified the new investment provider of the aPS as at date of death. We have then just paid that sum back out to the new provider and the spouse has benefited by ‘inheriting’ the ISA fund of their late partner as a ‘top-up’ to their own ISA.
I can find lots of guidance on-line about dealing with rogue executors who do not do as they should, but there is no guidance I can find about what to do when, as an Executor, you come up against a rogue bank or investment company.
Is there anything I can do?