The Prudential Assurance Company Limited · DRN-5521249

The complaint Mrs H and Mrs M as trustees of The L Family Trust have complained that The Prudential Assurance Company Limited (Prudential) incorrectly surrendered bonds held in trust without the proper authority. What happened decision as Trustee T. Later in July 2025 an investment was made for £40,602 into a Prudential Investment Plan which was placed into the existing trust. Trustee T was recorded as being the applicant and trustee for the investment. On 12 April 2019, Prudential received an instruction to surrender the investment from Trustee T. A “Cash-In” form was completed with the instruction to fully cash-in the investment a pay the proceeds to Trustee T. Mr L raised a complaint with Prudential in June 2024 concerning the process it followed when surrendering the investment. Prudential provided its final response to the complaint on 16 July 2024. It said: • It confirmed the policy holder was Trustee T, therefore, it could only provide information to the policyholder, trustee or financial adviser. • As such, it had not responded to information requests as Mr L and his representatives did not have authority to see it. • It believed it had surrendered the investment in good faith and in line with its requirements. A valid surrender request was received from Trustee T as the policy holder of the investment. It confirmed the instructions were signed by Mr L as well as the authorised signatory. And, as the bank account details and the address matched that of Trustee T, it paid the proceeds as directed. • It said the payment was not required to be made to the same account that the investment was made from and was made to the account specified on the instructions. • It would not provide details about its change of address processes but it had updated its records correctly. The surrender request it received contained the address for Trustee T it held on to its system and was signed by the registered director who appeared as an authorised signatory and had a specific power of attorney to act on behalf of Trustee T. • It acknowledged that it did not try to locate the new address for Trustee T when it had received a gone away notification in July 2018 which was an oversight. However, it does not feel this oversight had an impact on the surrender of the policy as a valid change of address was received in April 2019. • It did not seek any identification for the signatory on the surrender form as their name was listed on the authorised signatory list it had received, and their identity was identified through Companies House records and the power of attorney.

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• It did not feel it had breached the Trustee Act of 1925 s25 (5) as Trustee T delegated their power to surrender the investment and therefore it acted in accordance with valid instruction. • It offered £100 for distress and inconvenience caused by the parts of the complaint it did uphold. In August 2024 Mr L and his representatives submitted their complaint to our service. Our Investigator considered the merits of the complaint but didn’t think Prudential acted incorrectly when surrendering the investment but felt an award of £200 should be made for the distress and inconvenience caused. In summary they said: • When placing assets in to trust it effectively removes ownership of those assets. As such when Mr L placed his assets into the trust he was no longer the owner, and that the trustees became the legal owners of the assets held and would hold them on behalf of the beneficiaries who would be the beneficial owners. They felt the trust document they had seen made it clear that Trustee T was the trustee and that it had sought advice to invest the funds with Prudential. • They were satisfied that at the time of surrender the investment was in trust and that Trustee T was the trustee. As such they were the legal owners and the correct party for Prudential to accept instructions from. • They did not agree that Mr L’s authority was required to surrender the policy. This was because he was not a trustee. Although Mr L’s signature appeared on the surrender instruction they were satisfied it was only Trustee T that was required to give the instruction. • They considered that the financial adviser was not notified when the surrender instruction was received but did not consider it unusual that they were not notified. Furthermore, when the adviser was sent confirmation that the surrender had taken place there was no evidence to suggest it took any further action with that information. As such they were convinced that had the adviser been notified of the surrender prior to it being completed it would not have taken any action to prevent it. Neither was it a trustee so its consent would not have been required to surrender the investment. • They considered who gave the instructions to surrender the investment and felt that the person who signed on behalf of Trustee T was authorised to do so. Moreover, as they were acting as the registered director of Trustee T rather than in a personal capacity, the checks that were carried out by Prudential were acceptable. • The Specific Power of Attorney (SPOA) document that was also supplied with the surrender instruction was considered. Our investigator said whether or not it was compliant with the Trustee Act 1925, it did not remove the authority director of Trustee T to give instructions in relation to the trust. • Overall, they were satisfied that Prudential had acted correctly when allowing Trustee T to surrender the investment. • They agreed that there were some administrative errors concerning the information Prudential provided where it incorrectly said Mr L was the policy owner and Trustee T were the beneficiary. They felt this was an error and were satisfied that this had never been the case and would have caused Mr L and his representatives some distress and inconvenience when obtaining clarity. Mr L and his representatives disagreed with the outcome and raised further points concerning Board Resolution documents and the bank account that was used to pay the proceeds of the investment to.

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Our investigator clarified that they were persuaded that funds for the investment would have come from Trustee T as they had seen notes from a meeting where the initial invest with Prudential was discussed and felt it was likely the funds were sent from an account owned by Trustee T. In response to the Board Resolution documents our investigator said Mr L was welcome to send further evidence in but wanted to address this point ahead of receiving any documentation. In summary they said: • The wrong person signed the surrender instructions or that person didn’t have authority to do so. • They went on to explain that Prudential would not have been aware of any such documents or ought to have requested it to process the surrender. They remained of the opinion that Prudential had not acted incorrectly when surrendering the investment Mr L and his representatives responded further raising points concerning Trustee T’s bank account, the SPOA and the documents we had relied upon. In response to the points our investigator said; • It wasn’t unusual to rely on testimony from both parties and that Prudential had not supplied specific documentation in relation to its internal policies concerning the surrender of policy’s • That SPOA’s are created to give authority for others within a business to sign on that business’s behalf. They did not feel a SPOA was necessary to surrender the policy as it did not remove the director of Trustee T authority to give instructions. • The document detailing the bank account held by Trustee T did not stipulate it was the only account it held and as such did not feel this document altered the opinion already reached. Mr L and his representatives still disagreed with the investigator’s outcome, so the complaint has been passed to me for a decision. Mr L and his representatives have highlighted case law in respect of Prudential obtaining valid trustee authorisation and money laundering checks. 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’d like to thank Mr L and his representatives for their time in setting out the complaint and the level of evidence they have provided. I appreciate the amount of time and effort this would have taken. I have set out the complaint above in my own words and I appreciate this is not in the same level of detail that Mr L has done. I will not be responding to every point raised by the parties involved, this is not intended as a discourtesy, but I will only be focusing on the points I feel are central to the complaint. Our rules allow this approach, and it reflects the informal nature of this service as it is a free alternative to the courts. This may mean I have not commented on a point to same level a

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court would, nor does it mean I have ignored the point it just means I’m satisfied I do not need to comment on every individual argument. In my opinion the point that needs to be decided is whether Prudential acted correctly when accepting Trustee T’s instructions to surrender the investment. As our investigator explained that when placing an asset in to trust the settlor ceases to be the legal owner of the asset and the trust becomes the legal owner. This essential means the trustees have the authority to manage the assets held within it. I’ve reviewed the trust deed dated 13 May 2015 which establishes Mr L as the settlor and Trustee T as the trustee. I’m satisfied that the wording of the deed sets out that Trustee T are the only trustee. The application form that was completed for the investment shows that the trustee was the applicant and ultimately the policy holder, not Mr L. Based on what I’ve seen I’m satisfied that it is Trustee T that are the policy holders and have a direct relationship with Prudential. I’ve gone on to review the surrender form which was signed by Mr L and a director of Trustee T. I’m satisfied that the account information provided on the form matches that of Trustee T’s bank statement, demonstrating that the account was owned by them. I’m therefore persuaded that the proceeds of the investment were paid to Trustee T. I have seen that the signing director on the surrender form was appointed to Trustee T in February 2019 which was before the surrender instruction was given in April 2019. As such the director did hold the authority to provide this instruction on behalf of Trustee T. I’ve noted the complaint points surrounding the SPOA. The surrender instruction was made by a director and not by one of the additional authorised persons on the SPOA schedule. Therefore, I do not consider any arguments concerning the SPOA or other authorised persons relevant to the complaint that I need to answer. Like our investigator, I agree that Mr L was not required to authorise the withdrawal as he was not the policy holder nor was he the legal owner of the investment. I’ve considered the points raised concerning the director’s signature and ultimately whether that should affect the legitimacy of the surrender instruction. I cannot see a scenario that in the event had Prudential questioned the completion of the form that Trustee T would not have been able to satisfy any requirements regarding the director signing the form. It may also be useful to explain the test that I’ve applied in this situation being the “but for” test. In the event of a failure by a business we must consider what would have happened “but for” the failure occurring. In this case I’m persuaded that Trustee T would have still satisfied any requirements and questions put to them by Prudential. Ultimately, I’m satisfied that surrender would still have progressed. I’ve also given thought to the points raised concerning the money laundering checks. Taking a step back and thinking about what the general purpose of these checks, these would be carried out at surrender for the prevention of fraud, to prevent the money being paid to the wrong person and to ensure the legal owner of the investment received the money. In the complaint circumstances the trustees applied for the bond with Prudential and as such I don’t think it would have been reasonably necessary to conduct the sort of deep dive review Mr L and his representatives seem to be saying ought to have been carried out.

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Particularly given how the relationship started as Prudential’s relationship has always been with Trustee T. I’ve also noted that Mr L signed the document when he didn’t need to which showed Prudential that he was aware of the instruction given and was happy for the money to be paid in to that account owned by Trustee T. There have been no allegations that there were known issues with how Trustee T were managing trusts at the time the surrender instruction was given. As such there would not have been a reason for Prudential to question the instruction. The points raised by Mr L and his representatives are very detailed however I’m not persuaded that Prudential has acted incorrectly when surrender the investment in line with the instructions it received. From the evidence I have seen Trustee T was authorised and entitled to give instructions in relation to the investment and I have not seen any persuasive evidence that Prudential should have questioned the instructions it received. If I were to agree that there were procedural failings, which I do not, I’m persuaded that Trustee T would have been able to satisfy any further questions or checks Prudential would have carried out ultimately leading to the same outcome of the investment being surrendered. Our investigator recommended a total of £200 be paid for the distress and inconvenience caused to the current trustees. This was for the confusion caused by incorrectly referring to Mr L as the policy owner and Trustee T as the beneficiary, additionally there was some confusion caused by Prudential surrounding who was recorded as the trustee. I agree that this would have caused confusion and some distress but ultimately has not impacted the surrender of the investment. In light of what has happened I think this is a fair and reasonable way to resolve the complaint. Putting things right I believe Prudential Assurance Company Limited has not acted incorrectly when accepting Trustee T’s instructions to surrender the investment, but it has caused the current trustees of The L Family Trust some distress and inconvenience. I direct Prudential Assurance Company Limited to pay the trustees of The L Family Trust £200 in compensation. My final decision For the reasons I have explained, I uphold Mrs A and Mrs M’s complaint in part and direct Prudential to settle the complaint in line with what I have said above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs H and Mrs M as trustees of The L Family Trust to accept or reject my decision before 27 April 2026. Rob Croucher Ombudsman

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