EGR WEALTH LIMITED · DRN-6253083

The complaint Mr W complains he was mis-sold a minibond investment by EGR WEALTH LIMITED (formerly EGR Broking). He says it failed to meet its regulatory obligations, and this led to him taking out an investment that was not suitable for his circumstances. What happened Between late 2019 and early 2020, Mr W invested around £86,000 in a bond to be held in an ISA. He made a subscription of £20,000 in October 2019 from savings and a further subscription of £66,000 from a transfer of an existing cash ISA. He was due to receive interest at a rate of 8.1% per annum, with payments due to be paid twice a year. The investment was due to mature in December 2022. Mr W applied for the bond following EGR’s application process. He completed the required application paperwork it provided for both the bond and ISA application and transfer documents. As part of the application, he signed a declaration in October 2019 to indicate he was a restricted investor. In 2022, problems emerged with the investment as there were delays in payment of interest. In May 2022, EGR sent investors an update from the bond issuer, which apologised for the lack of communication regarding interest payments and explaining further issues with the performance of the investment. Then in September 2022, EGR sent Mr W notification that the bond issuer had been placed into administration as of 1 August 2022. In March 2024, Mr W’s representatives raised a complaint with EGR on his behalf about the sale of the bond. EGR didn’t respond to the complaint, so Mr W referred it to this service for an independent review. I issued a provisional decision in February 2026. This is what I said: “What role did EGR play in the sale of the investment? I’ve firstly considered EGR’s involvement in the arrangement of Mr W’s investment. The testimony provided by Mr W indicates that he was looking for investment opportunities with another firm and was contacted by an unregulated introducer, who in turn referred him to EGR. He said he had a meeting with the unregulated introducer, and they carried out checks on the status of EGR prior to proceeding and as EGR was FCA-regulated, there was no reason for him to think it would be inappropriate to engage with EGR. There are contract notes from EGR to show it executed the transactions on Mr W’s behalf to invest in the bond. It does not appear to be disputed that EGR approved the promotion of the bond and arranged Mr W’s investments in it – so it is accepted it is responsible for arranging. While Mr W’s representatives have suggested EGR provided advice, I haven’t seen there is evidence of regulated advice being provided by EGR. It’s clear that EGR played an active and significant role in the arrangement of Mr W’s

-- 1 of 12 --

investments. I am satisfied Mr W’s complaint relates to a regulated activity – that being arranging deals in investments. Did EGR meet its obligations to Mr W in the arrangement of the investment? Mr W’s complaint concerns what he considers to be a mis-sale of the investment. I’m satisfied that this includes EGR applying relevant tests regarding investor categorisation and appropriateness. Therefore, I will first set out the relevant considerations when looking at the application process EGR conducted before allowing Mr W to invest. Relevant considerations I have carefully taken account of the relevant considerations to decide what is fair and reasonable in the circumstances of this complaint. In considering what is fair and reasonable in all the circumstances of this complaint, I have taken into account relevant law and regulations; regulators rules, guidance and standards; codes of practice; and where appropriate, what I consider to have been good industry practice at the relevant time. In my view the key consideration as to what is fair and reasonable in this case is whether EGR met its regulatory obligations when it carried out the acts the complaint is about. I consider the following regulatory obligations to be of particular relevance here. The Principles for Businesses, which are set out in the FCA’s Handbook “are a general statement of the fundamental obligations of firms under the regulatory system” (PRIN 1.1.2G). I think 6 (Customers’ interests) is particularly relevant here. This provides: Principle 6 – Customers’ interests – A firm must pay due regard to the interests of its customers and treat them fairly.” Principle 6 overlaps with COBS 2.1.1 - A firm must act honestly, fairly and professionally in accordance with the best interests of its client (the client's best interests rule), which I also consider to be relevant here. I’m satisfied the investment instrument Mr W applied for was a non-readily realisable security (NRRS) and therefore there were rules restricting who this type of product could be promoted to and how to test whether the investment was appropriate for the potential investor. These rules were set out in COBS 4.7 and COBS 10. I have set out below what I consider to be the relevant rules, in the form they existed at the time Mr W invested. COBS 4.7 - Direct offer financial promotions COBS 4.7.7R said: “(1) Unless permitted by COBS 4.7.8 R, a firm must not communicate or approve a direct offer financial promotion relating to a non-readily realisable security a P2P agreement or a P2P portfolio to or for communication to a retail client without the conditions in (2) and (3) being satisfied. (2) The first condition is that the retail client recipient of the direct-offer financial promotion is one of the following: (a) certified as a ‘high net worth investor’ in accordance with COBS 4.7.9 R;

-- 2 of 12 --

(b) certified as a ‘sophisticated investor’ in accordance with COBS 4.7.9 R; (c) self-certified as a ‘sophisticated investor’ in accordance with COBS 4.7.9 R; or (d) certified as a ‘restricted investor’ in accordance with COBS 4.7.10 R. (3) The second condition is that the firm itself or: (a) the person who will arrange or deal in relation to the non-readily realisable security; or (b) the person who will facilitate the retail client becoming a lender under a P2P agreement or a P2P portfolio, will comply with the rules on appropriateness (see COBS 10 and COBS 10A) or equivalent requirements for any application or order that the firm or person is aware, or ought reasonably to be aware, is in response to the direct offer financial promotion.” COBS 10 – Appropriateness At the time COBS 10.1.2 R said: “This chapter applies to a firm which arranges or deals in relation to a non-readily realisable security, derivative or a warrant with or for a retail client, other than in the course of MiFID or equivalent third country business, or facilitates a retail client becoming a lender under a P2P agreement and the firm is aware, or ought reasonably to be aware, that the application or order is in response to a direct offer financial promotion.” COBS 10.2.1R said: “(1) When providing a service to which this chapter applies, a firm must ask the client to provide information regarding his knowledge and experience in the investment field relevant to the specific type of product or service offered or demanded so as to enable the firm to assess whether the service or product envisaged is appropriate for the client. (2) When assessing appropriateness, a firm must determine whether the client has the necessary experience and knowledge in order to understand the risks involved in relation to the product or service offered or demanded.” COBS 10.2.2R said: “The information regarding a client's knowledge and experience in the investment field includes, to the extent appropriate to the nature of the client, the nature and extent of the service to be provided and the type of product or transaction envisaged, including their complexity and the risks involved, information on: (1) the types of service, transaction and designated investment with which the client is familiar; (2) the nature, volume, frequency of the client's transactions in designated investments and the period over which they have been carried out; (3) the level of education, profession or relevant former profession of the client” COBS 10.2.6G said: “Depending on the circumstances, a firm may be satisfied that the client's knowledge alone is sufficient for him to understand the risks involved in a product or service. Where reasonable, a firm may infer knowledge from experience.” COBS 10.3.1R said: “(1) If a firm considers, on the basis of the information received to enable it to assess

-- 3 of 12 --

appropriateness, that the product or service is not appropriate to the client, the firm must warn the client.” COBS 10.3.2R said: “(1) If the client elects not to provide the information to enable the firm to assess appropriateness, or if he provides insufficient information regarding his knowledge and experience, the firm must warn the client that such a decision will not allow the firm to determine whether the service or product envisaged is appropriate for him.” COBS 10.3.3G said: “If a client asks a firm to go ahead with a transaction, despite being given a warning by the firm, it is for the firm to consider whether to do so having regard to the circumstances.” The first condition is the client has been certified or has self-certified as one of the categories listed. There is evidence from the October 2019 application that Mr W certified as a ‘Restricted Investor’ – in that he signed a declaration in this respect. There is only limited information recorded about his assets at the time, so it is unclear from this whether his declaration as is accurate, or whether EGR took any steps to satisfy itself it was accurate, particularly considering the size of the transaction. To qualify as a Restricted Investor, it meant in the twelve months preceding Mr W had not invested more than 10% of his net assets in NRRSs and also wouldn’t be investing more than 10% in the following year. As Mr W was applying to invest over £80,000 in the bond, this would mean to meet the Restricted Investor category he would have needed to have had significant other assets, which I haven’t seen to be the case. So, I do have some reservations on the accuracy of this categorisation, and whether EGR did enough in this respect. I also haven’t seen anything to suggest he would have met one of the other categories. But even if Mr W did meet the criteria of a Restricted Investor, this would only satisfy the first condition of COBS 4.7.7. I think there are other failings by EGR when allowing him to invest. The second condition set out in COBS 4.7.7R required EGR to comply with the rules on appropriateness, set out in COBS 10 and quoted earlier in my findings. The rules at the time (COBS 10.2.1R) required EGR to ask Mr W to provide information regarding his knowledge and experience – and for this information to be relevant to the product offered (the first limb of the rule). The rules required that information to then be assessed, to determine whether he did have the necessary experience and knowledge in order to understand the risks involved (the second limb of the rule). The application form includes a section that asks very limited questions about Mr W’s existing knowledge and experience. There is a section titled ‘Additional information’ which was presumably to be used by EGR to meet the required assessment. In Mr W’s application there is a statement that’s says “I have the necessary experience and knowledge in order to understand the risks involved in relation to the product offered or demanded” with a box next to it that contains an “ * ”. It isn’t clear what this means, but again I assume this was considered to be a positive answer. There is a further statement asking Mr W to provide information regarding his knowledge and experience in the investment field relevant to the specific type of product – with a box to provide this. But no further information is given at all in the application I’ve seen. The section ends and there is no other details of Mr W’s knowledge and experience that could be sued to make an assessment.

-- 4 of 12 --

I’m not persuaded the information requested and gathered is sufficient to meet the requirements of the rules. The limited questions and lack of detail provided means I don’t find EGR could have made the assessment it was obliged to about appropriateness to support Mr W did have the knowledge and experience required. The single question about knowledge and experience was extremely basic and at best amounted to requiring Mr W to make a self-declaration of his capacity to understand the risks associated with the investment. There is a complete lack of detail given and a failure to obtain any information to enable EGR to assess whether the service or product envisaged is appropriate for him. I haven’t seen EGR attempted to do anything further to satisfy itself of his knowledge and understanding. The relevant obligations are placed upon EGR, not Mr W. So, I don’t find information was obtained for EGR to assess whether the service or product envisaged is appropriate for him or assess whether Mr W had the capacity to fully understand the risks involved in a specialist investment of this type. I acknowledge EGR’s point that it is entitled to rely on the information provided in the application. But the evidence, I’ve seen indicates what it did gather is extremely limited and appears incomplete. While EGR says it wasn’t required to probe Mr W’s experience, it is unclear to me how it could make any meaningful assessment from the evidence presented in the application I have been provided with. This isn’t about me suggesting that it had to do more than the rules indicate, but rather the limitations of the application it provided meant it wasn’t in a position to meet its obligations. Taking all of the evidence into account, I’m not persuaded EGR did adequately test whether Mr W had the knowledge to understand the risk associated with this type of complex investment. The evidence available doesn’t support that he had significant experience in investing in this type of instrument and rather his level of knowledge was limited. The risks of the bond were complex and multifactorial. It was not, for example, a question of whether Mr W simply understood money could be lost – but whether he was able to understand how likely that might be and what factors might lead to it happening. His acknowledgement in his complaint submissions that he had a medium level of investment experience and sufficient knowledge to understand that investment risks exist, isn’t in my view the same as having the required knowledge and experience to understand the complex product he was about to enter into. As the first limb of COBS 10.2.1R was not met EGR was unable to carry out the assessment required under the second limb. EGR should have been confident, from the information it asked for, that it was able to assess if Mr W had the necessary experience and knowledge in order to understand the risks involved with investment in the bond. But it was not in a position to make such an assessment, based on the information it obtained. It is not even clear from the application that Mr W would have known his capital would be at risk, let alone that he had an understanding of how likely it would be that he could lose his capital and/or what factors might lead to it happening. In addition, from the evidence I’ve seen, Mr W’s circumstances do not suggest he did have the required knowledge and experience. It is apparent that a significant proportion of the invested funds came from a cash ISA transfer - this is detailed in the application paperwork for the second tranche. And at the time of the first transaction in late 2019, I’ve seen no evidence that he had experience of investing in this type of product. Mr W’s submissions to us suggest he had some investment knowledge, but not experience, and understanding of what he was investing in here. And as noted, above, it also casts doubt whether he met the definition of a Restricted Investor, as he was investing more than 10% of his net assets in the bond. Had EGR followed its obligations, I think the most likely conclusion it would have reached, was that Mr W did not have the necessary experience and knowledge to understand

-- 5 of 12 --

the risks involved with the bond. If EGR assessed that the bond was not appropriate, COBS 10.3.1R said a warning must be given and the guidance at COBS 10.3.3G said a business could consider whether, in the circumstances, to go ahead with the transaction if the client wished to proceed, despite the warning. I’ve explained my concerns about the testing of Mr W’s knowledge and experience, and had it adequately tested this, EGR would have come to the conclusion that the bond wasn’t appropriate for him in the first place. A clear statement would have left Mr W in no doubt the bond was not an appropriate investment for him. And he ought to have been privy to such a warning, had his appropriateness been tested in line with the requirements of the rules. Even if Mr W still said he wanted to proceed after being given a warning, I still think there is more EGR needed to do if it had asked for appropriate information about Mr W’s knowledge and experience. In these circumstances, I think it would have been fair and reasonable for EGR to conclude it should not allow Mr W to proceed. Had he been asked for appropriate information about his knowledge and experience this would have shown he may not have the capacity to fully understand the risks associated with the bond. I’ve seen no evidence to show Mr W had anything other than a general knowledge of investments. So, it would not have been fair and reasonable for EGR, to conclude it should proceed if Mr W wanted to, despite a warning (which, as noted, was not in any event given). I acknowledge EGR doesn’t agree that even if a warning is given and Mr W still decided to proceed with the investment, it should have refused to allow this. It doesn’t accept the regulations say just because an investment was deemed inappropriate, it could not be allowed to proceed. But the point I’ve made here is not that there is a hard stop placed upon EGR, but rather that if appropriateness hadn’t been established, EGR would have realised it wouldn’t be right to allow Mr W to proceed. So rather than a rule preventing him from proceeding, a fair and reasonable assessment on the situation would have meant EGR decided not to allow the application to proceed as it wasn’t in Mr W’s best interests. In summary, I’m satisfied EGR did not act fairly and reasonably when assessing appropriateness. By assessing appropriateness in the way it did, it was not treating Mr W fairly or acting in his best interests. If it had acted fairly and reasonably to meet the relevant regulatory obligations when assessing appropriateness, Mr W would not have got beyond this stage. I understand EGR’s position is that there were sufficient risk warnings given. As mentioned earlier, I haven’t seen that the application did provide risk warnings, but assume EGR is also relying on the information contained in the IM. As the second condition set out in COBS 4.7.7R could not be met and things could not have proceeded beyond this; this means Mr W shouldn’t have received the IM at all. And so, any information within that cannot now reasonably be relied on to show he was aware of the risks associated with the bond. I’ve also not seen sufficient evidence to show Mr W had the capacity to fully understand the IM – a lengthy and complex document – given his limited knowledge and experience. As such, EGR can’t fairly rely on any possible reading of this as a means to correct the failings set out above. Firstly, Mr W should not have been able to proceed had EGR acted fairly and reasonably to meet its regulatory obligations. I acknowledge that other parties may have caused or contributed to Mr W’s losses but, notwithstanding that, I‘m satisfied it is fair to ask EGR to compensate him as the appropriateness test was a critical stage, for which it was responsible for.

-- 6 of 12 --

Secondly, for the reasons I have already given, I am not in any event persuaded Mr W did proceed with a full understanding of the risks associated with the bond. The limited information contained in the application hasn’t persuaded me that he had an understanding of the bond or the requisite investment experience. The only question asked about having the necessary experience and knowledge in order to understand the risks involved was simplistic, generic question that doesn’t highlight the specific risks involved with the product. I am not persuaded Mr W had the capacity to fully understand the risks associated with the bond – and he was in this position because EGR did not act fairly and reasonably to meet its regulatory obligations at the outset. I’m therefore satisfied it is fair to ask EGR to compensate Mr W for the losses he claims. In addition, even if EGR disputes the findings above, I think there is a strong argument to say EGR has failed to act in Mr W’s best interests by allowing him to invest in the second transaction in January 2020. By the time this transaction was carried out by EGR, the FCA had set out the restrictions relating to the sale and promotion of speculative illiquid securities (SIS) to ordinary retail investors, which I’m satisfied Mr W was. EGR had evidence through the application it received from Mr W that he was a retail client and didn’t meet the other categories of investor. It also had awareness of the risks associated with the bond through its approval of the IM, so would understand it met the definition of an SIS. And I’m satisfied the purpose of the FCA’s interventions in late 2019 / early 2020 was to restrict the sale of SISs to ordinary retail investors, like Mr W. In light of the activities EGR was likely to be involved in through its authorisation, it should have been fully aware of the communications and COBS updates issued by the FCA. By carrying out the arrangements for Mr W, a retail investor, to invest further funds in the Access Commercial bond in January 2020, in my view it was not acting in his best interests, as required under Principles 6 and COBS 2.1.1. I consider this to be a further failing, so for all of the reasons provided, I intend to uphold this complaint.” Mr W responded to confirm he accepted the outcome. EGR responded to confirm it didn’t agree and provided further submissions for me to consider. In summary it said: • On ‘Appropriateness’ EGR’s argument that the position taken is akin to applying rule changes in late 2022 to transactions taking place years earlier has been dismissed. In 2019/20, a firm was perfectly entitled to rely on what a customer represented and was not obliged to seek supporting / verificatory evidence. • The FCA’s consultation in advance of the rule changes in PS22/10, under the heading “Appropriateness Test” stated the proposed enhancements to the appropriateness regime would not apply to appropriateness assessments required in the application of COBS 10 and 10A. That is clear confirmation that the enhanced appropriateness requirements introduced in 2022/23 were new requirements and only applying to Restricted Mass Market Investments (RMMI) not to other products. The findings are unreasonably engaging in retrospective regulation by applying expectations / rules from 2022/23 to 2019/20. • It is also reflected in the self-certification commentary in PS22/10 that the FCA proposed to bring in more stringent requirements to evidence investors coming within the relevant categorisations. It was made clear that a firm was not required to go behind this and demand further evidence. This also addresses the “reservations”

-- 7 of 12 --

expressed by the Ombudsman about the Restricted Investors certification. • The view that Mr W proceeding with the investment even if EGR issued the prescribed warning to him advising that it did not consider the bond investment suitable for him is not accepted. This is a separate issue (causation) to the appropriateness assessment (breach) and it is trite law that causation and breach must be considered wholly independently. It is not reasonable to say where there has been a breach of the rules, to automatically make out the causation case and take it as read that a further warning would have dissuaded Mr W from investing. • There were warnings in the application process and significant risk warnings in the IM that can have left Mr W in no doubt about the risks associated with the proposed investment. He clearly understood it well enough to be able to confirm that he had not invested in a similar product type. He had taken the decision to proceed in spite of these risk warnings, so it cannot be assumed that, on the balance of probabilities, had EGR added to the warnings by saying that those risks meant they did not consider the bond suitable for him, he would have abandoned the course of action. It is not reasonable to dismiss the clear and numerous risk warnings in the IM on the basis that Mr W shouldn’t have been given a copy. Being provided with a plethora of risk warnings did not dissuade Mr W and there is no suggestion that a further warning from EGR would have. • The provisions of the FCA Handbook do not require a firm to decline to proceed if a customer ignores an appropriateness warning – and state that EGR should have refused to act. There is no logical reasoning for this position, or explanation as to why the Handbook provisions should be disregarded instead say it was “not fair and reasonable” for EGR to have allowed the transaction to proceed. • It is denied that EGR acted in breach of the “Temporary intervention on the marketing of mini-bonds to retail clients” (the “TPI”). The TPI did restrict regulated firms from approving or communicating financial promotions in relation to SIS. However, it did not apply to financial promotions approved before 1 January 2020 (which was the case with the Bond), which could still be communicated by unauthorised persons, although the FCA issued guidance to regulated firms so that they could check that their approval of the financial promotion had been adequate. In this case, the bond issuer would have communicated the financial promotion to Mr W and provided the IM, and following this, EGR would have provided the relevant application documentation, to deal with the administrative task of opening the investment. The important point is that EGR was not communicating a financial promotion. 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. I’ve reviewed the further submissions I received in response to my provisional decision and re-considered all of the evidence and arguments provided. Having done so, I haven’t found reason to change the outcome I set out. I’ll explain why. Firstly, I acknowledge the points made by EGR in relation to the appropriateness rules. EGR argues in 2019/20, a firm was entitled to rely on what a customer represented and was not obliged to seek supporting / verificatory evidence. But as I set out in my provisional findings, the evidence it has provided to support what it did receive from Mr W is extremely limited. In my view, the information collected in the application is inconclusive and incomplete. There was no information gathered at all in the application form relating to Mr W’s previous experience – and the section specifically regarding knowledge and experience in the investment field relevant to the specific product is left blank – and therefore incomplete. EGR say in 2019/20 it was not reasonable for it to be required to complete further verification, and it was sufficient to be satisfied with yes/no (binary) questions and answers to satisfy the

-- 8 of 12 --

COBS 10 requirements. But in this specific sale, it is not a question of relying on binary answers as the application form provided doesn’t show even this level of information was gathered. So, I don’t consider this to be a question of verifying evidence, as there was no information gathered to assess or validate Mr W’s existing experience. In my view, even though EGR says it was entitled to rely on Mr W’s representations without seeking further evidence, the limited nature of what it did obtain was insufficient for it to meet its obligations. I don’t find it had a basis for making the assessment that it was required to, from what it received from Mr W. It is apparent that EGR believes in reaching my provisional findings, consideration has been given to rule changes that were introduced after Mr W’s investment was arranged. It has referred to updated rules set out in the FCA’s Policy Statement PS22/10, and referenced the FCA’s consultation paper issued in advance of the rule changes to support its assertions. In my provisional findings, I was clear on what I found to be the relevant considerations for the complaint. I set out the rules in COBS 4.7 and COBS 10 in the form they existed at the time Mr W invested. I made no reference to later rule changes, and didn’t consider them when reaching my findings. While EGR says the findings are unreasonably engaging in retrospective regulation, there is little more I can say other than to again confirm the findings I’ve reached took into account the rules in place at the time. In respect of the client warning part of the rules, EGR say this is a separate issue to the appropriateness assessment breach, and the causation and breach must be considered independently. It doesn’t think it is reasonable to say a breach would lead automatically to make the case for causation and take it as read that a warning would have dissuaded Mr W from investing. I’ve considered this point, the finding I set out did take into account the impact a warning would have, and I didn’t automatically decide a breach would make EGR responsible for the loss claimed. When reaching my finding, I took into account what I know of Mr W’s circumstances in order to decide what I find is most likely to have happened if he was provided with a clear statement that the bond wasn’t appropriate. It is my view that the impact of a warning would have most likely led to Mr W not investing. His circumstances and the evidence available, don’t indicate to me he was sufficiently motivated to take on the investment regardless of any warning that might be given. This is an on-balance view that I need to take. Overall, I wasn’t persuaded that the evidence supported that it is more likely he would have wanted to proceed. I acknowledge EGR’s points that it feels Mr W was given sufficient risk warnings during the promotion and application process, so any warning regarding appropriateness would not have put him off investing. But as I set out in my provisional findings, I don’t find it reasonable for it to rely on the contents of the IM in this way. The contents of the IM doesn’t remove the obligation to obtain the information (as per COBS 10.2.1R and 10.2.2R) in order to determine whether the client has the necessary experience and knowledge in order to understand the risks involved in the investment concerned. Also, while the application form does refer to the risk of losing capital, there isn’t anything to help Mr W understand the specific risk of the bond, or in what circumstances these risks might materialise. I make these points, particularly in light of what I’ve seen of his existing knowledge and experience at the time. Rather from the evidence I’ve seen, I haven’t found that Mr W had the necessary experience and knowledge in order to understand the risks involved in relation to a product like this which had a complex structure and the risks are multifaceted, this is different from having an understanding there was a risk to his capital.

-- 9 of 12 --

EGR has also referenced the provisions of the FCA Handbook, and says the rules in COBS 10 do not require a firm to decline to proceed if a customer ignores an appropriateness warning – and state that EGR should have refused to act. It doesn’t accept the finding that it should not have allowed the transaction to proceed. In reaching this finding, I have taken into account the relevant rules in the handbook - COBS 10.3.3G said: “If a client asks a firm to go ahead with a transaction, despite being given a warning by the firm, it is for the firm to consider whether to do so having regard to the circumstances.” So, I think if EGR had provided a warning and Mr W still wanted to go ahead, it needed to consider in the specific circumstances whether it should allow the investment to continue – or do something else. I’m not saying the rules require it to refuse the investment but rather consider whether to continue to go ahead and complete the transaction. In my view, based on Mr W’s circumstances, EGR should reasonably have concluded that it would not have been in his best interest for EGR to allow him to proceed. Lastly, I acknowledge the points EGR make about the temporary intervention, and that it doesn’t accept a breach has occurred. In my provisional decision, I didn't make a specific finding that there had been a breach. The point made was in support of the considerations EGR should have had when dealing with Mr W in light of whether it was acting in his best interests by allowing him to invest in the second transaction in January 2020. But in any case, as I’ve already found a significant failing in how EGR followed the appropriateness rules in COBS 10 – so I still think the complaint should be upheld. For the reasons above, and those set out in my provisional decision, I think Mr W’s complaint should be upheld. Putting things right In assessing what would be fair compensation, I consider that my aim should be to put Mr W as close to the position he would probably now be in if he had not proceeded to make his investments. I think Mr W would have invested differently. It is not possible to say precisely what he would have done, but I am satisfied that what I have set out below is fair and reasonable given Mr W's circumstances and objectives when he invested. What should EGR do? To compensate Mr W fairly, EGR must: • Compare the performance of Mr W's investment with that of the benchmark shown below and pay the difference between the fair value and the actual value of the investment. If the actual value is greater than the fair value, no compensation is payable. • EGR should also add any interest set out below to the compensation payable. • Pay Mr W £300 for the worry caused by the total loss of his investment. Income tax may be payable on any interest awarded.

-- 10 of 12 --

Portfolio name Status Benchmark From ("start date") To ("end date") Additional interest Access Capital Bond Still exists but illiquid For half the investment: FTSE UK Private Investors Income Total Return Index; for the other half: average rate from fixed rate bonds Date of investment Date of my final decision Not applicable Actual value This means the actual amount payable from the investment at the end date. If at the end date the portfolio is illiquid (meaning it could not be readily sold on the open market), it may be difficult to work out what the actual value is. In such a case the actual value should be assumed to be zero. This is provided Mr W agrees to EGR taking ownership of the portfolio, if it wishes to. If it is not possible for EGR to take ownership, then it may request an undertaking from Mr W that he repays to EGR any amount he may receive from the portfolio in future. Fair value This is what the investment would have been worth at the end date had it produced a return using the benchmark. To arrive at the fair value when using the fixed rate bonds as the benchmark, EGR should use the monthly average rate for one-year fixed-rate bonds as published by the Bank of England. The rate for each month is that shown as at the end of the previous month. Those rates should be applied to the investment on an annually compounded basis. Any additional sum that Mr W paid into the investment in January 2020 should be added to the fair value calculation at the point it was actually paid in. Any interest paid directly to Mr W from the bond should be deducted from the fair value calculation at the point it was actually paid so it ceases to accrue any return in the calculation from that point on. If there is a large number of regular payments, to keep calculations simpler, I’ll accept if EGR totals all those payments and deducts that figure at the end to determine the fair value instead of deducting periodically. EGR must pay the compensation within 28 calendar days of the date on which we tell it Mr W accepts my final decision. If EGR fails to pay the compensation by this date, it should pay 8% simple interest per year on the loss, for the period following the deadline to the date of settlement. Why is this remedy suitable? I have chosen this method of compensation because: • Mr W wanted a good return with a small risk to his capital. • The average rate for the fixed rate bonds would be a fair measure for someone who wanted to achieve a reasonable return without risk to his capital.

-- 11 of 12 --

• The FTSE UK Private Investors Income Total Return index (prior to 1 March 2017, the FTSE WMA Stock Market Income total return index) is a mix of diversified indices representing different asset classes, mainly UK equities and government bonds. It would be a fair measure for someone who was prepared to take some risk to get a higher return. • I consider that Mr W's risk profile was in between, in the sense that he was prepared to take a small level of risk to attain his investment objectives. So, the 50/50 combination would reasonably put Mr W into that position. It does not mean that Mr W would have invested 50% of his money in a fixed rate bond and 50% in some kind of index tracker fund. Rather, I consider this a reasonable compromise that broadly reflects the sort of return Mr W could have obtained from investments suited to his objective and risk attitude. My final decision I uphold the complaint. My final decision is that EGR WEALTH LIMITED should pay the amount calculated as set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr W to accept or reject my decision before 24 April 2026. Daniel Little Ombudsman

-- 12 of 12 --