Andrew is the health and welfare manager for his disabled son, Jack. The court appointed a trustee company as Jack’s property manager and, initially, Andrew and the trustee company had a good relationship. However, in 2016 the relationship manager changed, and the new person said she had invested Jack’s $120,000 in a term deposit.
Four months later Andrew checked in about the term deposit and discovered the new relationship manager had not invested the money. Instead, Jack’s money had been sitting in a non-interest-bearing account and Jack had lost about $1,200 in interest.
The relationship manager apologised for the mistake and said she would deposit $1,200 into Jack’s account immediately to make up for the lost interest.
In 2019 Andrew was looking back over the financial statements for the last three years and could not see the lost interest deposit so complained to the trustee company. The trustee company said that the money had been included in a larger amount of interest credited to the account the following year. This advice was incorrect.
In 2021 Andrew was still not satisfied that the lost interest had been credited to Jack’s account, so complained again.
The trustee company investigated Andrew’s complaint and discovered they had paid the money into the account in 2016 in two separate amounts, one month apart. The trustee company had changed their record keeping in the interim and couldn’t explain why the refund was made in this way or why Andrew had been given the wrong information in 2019.
The trustee company:
- apologised for the confusion and for being unable to provide a complete explanation of why the refund was made in two amounts
- provided account records showing the two deposits
- deposited $1,200 into Jack’s account as compensation for the confusion.
However, the trustee company went on to say they were concerned that Jack’s money was held in a term deposit. The trustee company had analysed Jack’s needs and thought the money would be better invested in a diversified managed fund. Andrew rejected the trustee company’s advice, worried that the diversified fund was not a safe investment for Jack.
Dispute
Andrew complained to FSCL, primarily about the trustee company wanting to invest Jack’s money in a diversified fund. Andrew had checked the trustee company’s website and noticed the warnings that the fund was not guaranteed. Andrew was worried that the trustee company might lose all Jack’s money.
Andrew went on to say that he had received three different explanations about what happened to the lost interest, and he did not know who to believe. Although the trustee company had now deposited $1,200 into Jack’s account, Jack had lost the interest that would have been earned on this money since 2016.
The trustee company agreed to deposit Jack’s money in a term deposit again but said, when the term expired, they would review Jack’s situation again and it could be that a diversified fund would be in his best interests. The trustee company offered to meet Andrew to discuss why they considered a diversified fund was appropriate for Jack.
The trustee also acknowledged the confusion caused by the conflicting explanations about the lost interest refund but said they had paid $1,200 to compensate Andrew and Jack for the confusion caused.
The trustee company also said, if Andrew did not have confidence in their ability to manage Jack’s affairs, they would not oppose Andrew taking over the property management role.
Review
We acknowledged Andrew’s concern for his son’s welfare but explained our view that the trustee company had responded appropriately.
It seemed to us most likely that the two payments deposited to Jack’s account a month or so after Andrew complained about the lost interest were compensation for that lost interest. It seemed too much of a coincidence that the money could be anything else. We were, therefore, of the view that the $1,200 paid into Jack’s account in 2021 was reasonable compensation for any further inconvenience caused.
We also explained to Andrew that, as Jack’s property manager, the trustee company were obliged to review Jack’s situation and ensure his money was appropriately invested, and this could mean investing in a diversified fund. We agreed with the trustee company’s suggestion that, if Andrew had lost confidence in their ability to manage Jack’s money, he should talk to a lawyer about applying to the court to take over this role.
Resolution
Andrew did not accept our decision, saying:
- he was not convinced that the lost interest had been credited to the account in 2016, so wanted further compensation for the interest lost on the $1,200 over the last five years
- a diversified fund was not appropriate for his son because Jack could lose all his money
- the trustee company should resign from their role as property manager.
We were not persuaded to change our decision and said that Andrew should discontinue his complaint.
Insights for participants
Although the trustee company had made mistakes in the past, their response to Andrew’s complaint was excellent. The trustee company:
- apologised for the confusion caused by the different explanations
- properly investigated what had happened in the past and gave as much information as they could about the lost interest
- offered a generous amount of compensation
- explained why they considered a diversified fund was appropriate for Jack, and offered to meet Andrew to discuss further
- reinvested the money in a term deposit to allow Andrew time to consider taking over as property manager
- realised that sometimes ending a relationship can be the best way forward.
