The Claimant, a retiree intending to place RM300,000 into a fixed deposit was persuaded by a bank representative to invest in a closed-ended unit trust product.

He was assured it was similar to a fixed deposit with higher returns (about 3–4%), capital protection, and minimal risk. On maturity in January 2024, he received only RM248,388.35, a shortfall of RM42,873.79 after sales charges.

FINANCIAL INSTITUTION (FI)’s POSITION

The bank argued that the claimant was not a novice investor, having previously invested in a similar fund. It maintained that the risks were explained through the Product Highlight Sheet and that he was assessed as a “Moderate Investor.”

KEY ADJUDICATION FINDING

The Adjudicator found shortcomings in the bank’s conduct. It was unlikely that all product documents were explained adequately in a 30-minute meeting. The Suitability Assessment Form contained inaccuracies that were not verified, and the claimant was not provided with the Information Memorandum disclosing his cooling-off right.

The representative’s assurance that the product was “like a fixed deposit” was misleading and inconsistent with the fund’s actual risks.

ADJUDICATION AWARD

The Adjudicator ruled in favour of the claimant, ordering the bank to reimburse RM42,873.79. The decision highlighted the duty of financial institutions to ensure accurate disclosure, proper suitability assessments, and clear explanation of cooling-off rights, particularly for elderly or risk-averse investors.