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Share windfall disappoints

A woman who was expecting $1 million from the sale of shares and instead only received $24,000 took a complaint about the trustee responsible for the sale to FSCL.

Monday, November 18th 2019, 6:10AM 3 Comments

The woman’s husband died suddenly in 2017 and had appointed a professional trustee to act as the executor of his estate.

But a staff member at the trustee’s firm made a mistake in calculating the value of some UK shares the woman’s husband had owned.

She multiplied the share price by pounds rather than pence.

As a result, from late 2017, the woman had been under the impression she would receive more than $1 million from the sale.

When the transaction finally happened this year, she received only $24,000. She said the trustee's service was so bad she wanted a refund of all the fees she had paid.

For its part, the trustee apologised but did not offer a refund.

The woman told FSCL she had bought a property at least in part relying on what she expected to get from the shares.

“We considered that, theoretically, [she] could sell her property and recoup what she had paid for it. In that sense, [the trustee’s] negligence had not caused any actual ‘loss’. We also considered that shares are an inherently risky investment and their values can fluctuate, so [the client] probably should not have bought anything in reliance on the shares’ value until they had actually been sold. However, we recognised how upsetting the whole situation must have been for [the client], who was still grieving the loss of her husband. Our view was that the trustee’s service had fallen below an acceptable standard and we invited it to make a settlement offer.”

The woman was offered $10,000 to settle the complaint, which she accepted.

Tags: complaints FSCL

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Comments from our readers

On 22 November 2019 at 9:57 pm Winka said:
Unacceptable event

I can only extend on my comments over previous years on the debacle surrounding most trustees.

During the rush here in NZ to punish or even jail several finance company directors i wrote to compare the directors with their relevant trustees.
The name "trustee" clearly suggests that you can expect impeccable "trust.'
Yet even though those trustees were ultimately overseeing the relevant directors, not one of them were hauled before the courts.

Whatever happened to things such as PI insurance?

The woman featured in this article has unfortunately been left "short-changed" and has somehow accepted a full and final pathetic $10,000 instead of a figure with more zeros if that would have been the correct calculation.

the point is that this is yet another example of how the trustee "boys club" has got of very lightly....again.
On 25 November 2019 at 7:34 am Murray Weatherston said:
Reverse engineering leads to a hypothesis that a GBP investment worth between NZD9500-10000 was initially valued at NZD950,000 to 1 million.
Trustee's employee failed to recognise a UK listed shareprice was quoted in pence and instead thought it was pounds.
Have to wonder about the trustee company's operational processes - was the employees work ever supervised - maybe the supervisor made the same error?
On 25 November 2019 at 3:58 pm Tash said:
Winka, what do you mean the woman was "short-changed"? She got what was due to her. Whether or not she sufferred damages as a result of the error is the legally pertinent question.

FSCL's reported to have said she didn't suffer any actual loss.


Selling and 'recouping' may be easier said than done and selling comes with costs (commissions, conveyancing fees etc) Assuming she keeps the house and no actual losses are sufferred, what is the basis for the $10,000 award?

$10,000 may have been too much and it may have been too little. In this case the trustee firm may have been able to easily afford paying $10,000 just for disappointment, but what if it was a single adviser who made a mistake like this that disappointed but causes no actual loss?

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