A client, named only as Mr C, brought the case after he was incorrectly told to invest in a product with a term that was unsuitable for him.

Mr C had invested £70 a month into a regular savings plan, beginning in 1990.

The client discontinued the savings plan after around 15 years but kept hold of the investment in order to benefit from any increase in value.

The investments made by Sanlam were also said to have exposed the client to a greater level of risk than was appropriate.

The ombudsman said there was little in the documentary evidence produced to indicate the client wanted an investment with the time horizon as far into the future.

Sanlam, in its rebuttal of the client’s claim, said: “Mr C had investment experience and was aware of the potential risk of capital loss.

“He had sufficient money in reserve and was in a financial position to accept some risk.

“The adviser wasn’t required under the regulations in place at the time to record a specific attitude to risk for Mr C.

“The adviser didn’t recommend the fund to Mr C – it was left to him to choose a fund from those available.”

The firm also said the client could “stop making contributions at any time before [reaching 65] if he wanted, as he had done.”

But the ombudsman ruled in favour of Mr C.

The judgement read: “The adjudicator felt that the specific recommendation made to Mr C was nevertheless not suitable.

“He felt the fund that Mr C’s contributions were invested in appeared to carry a higher level of risk than Mr C was likely to have wanted.

“But, primarily, the plan was unsuitable on the basis that it was a long term product that only really became efficient as a savings vehicle once it had been maintained for 20 years or longer.”