Not upheld: Pension transfer advice complaint against JM Independent Financial Advisers Ltd

Decision detail

Summary

Mr W complained that JMIFA failed to inform him of the buddy transfer system when advising him to transfer his occupational pension scheme in mid-2016, which would have allowed him to retain a protected retirement age of 50. Instead, the transfer to a personal pension meant he could not access benefits until age 55. Subsequently, Mr W became unemployed and experienced severe financial difficulties, discovering that colleagues had successfully retained their age 50 retirement through buddy transfers. The ombudsman found the complaint not upheld, reasoning that the buddy transfer option was not well known at the time, was not disclosed by the scheme trustees or included in transfer documentation, and critically, there was no evident need for Mr W to retire before 55 based on his circumstances at the time of advice. The ombudsman rejected using hindsight and found that even if informed, practical obstacles to arranging a buddy transfer existed.

The Ombudsman's reasoning

The ombudsman acknowledged that while the adviser was unaware of buddy transfers, this was not necessarily a clear error given that the legislation was not well known in mid-2016, the scheme trustees and administrators did not inform JMIFA of this option, and it was not included in the transfer pack until July 2017. Critically, the ombudsman found that at the time of advice, there was no evident need for Mr W to retire before age 55 - he was 49, expecting to find new employment, and had recorded his retirement target as age 55. The ombudsman rejected using hindsight to assess the advice, noting that Mr W's current financial difficulties could not have been foreseen. Additionally, even if the adviser had known about buddy transfers, Mr W would have needed to find a colleague willing to transfer with the same adviser at the same time, which was not guaranteed. The ombudsman concluded that many factors and variables dilute JMIFA's responsibility for Mr W's situation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website