Two elderly sisters, aged 82 and 79, sought the advice of their bank on how they might get a better return on their entire savings, which until then had been kept in a term deposit account at the bank.

They were advised to place their money in a "balanced income portfolio" for three years. At the end of the period, the amount of their capital to be paid back would depend on the performance of the Eurostoxx 50 Index.

When the investments matured three years later, the sisters had lost €52,000 from their capital sum. A complaint was made to the Ombudsman that the bank had failed in its duty of care to the complainants.

The Ombudsman found that the financial product that had been recommended was a sophisticated one. The complainants said no other product had been discussed with them.

The Ombudsman noted that during the term of the investments, no withdrawals could be made, meaning that the sisters were cut off from access to their capital during the period.

The Ombudsman stated that, given the complainants' age, it should have been obvious to any professional banker that some provision that gave them access to their capital in the event of an emergency would be required. It should also have been clear that the sisters' chances of recovering any losses would be limited.

The Ombudsman did not agree that the product was the most suitable one available and he concluded that the institution failed in its duty of care to these complainants.

Noting that the bank had already paid an ex gratia award of €5,000 to the complainants, the Ombudsman directed that a further sum of €42,500 be paid to the sisters as compensation.