Upheld: Pension transfer advice complaint against Prudential Pensions Limited
Financial Ombudsman decision DRN-3244871 of 2022-01-18T00:00:00+00:00. Pension transfer advice complaint against Prudential Pensions Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-3244871 |
|---|---|
| Decision date | 2022-01-18T00:00:00+00:00 |
| Firm | Prudential Pensions Limited |
| Product | Pension |
| Claim type | Pension transfer advice |
| Outcome | Upheld |
| Remedy | Prudential must recalculate the sale proceeds and PCLS as if the sale had been completed at the first pricing point available after 11:32am on 12 March 2020. If this results in a higher PCLS, the additional amount must be paid to Mr G with interest at 8% per annum from the date the original PCLS was paid to the date of settlement, less applicable tax. |
Summary
Mr G instructed Prudential on 12 March 2020 to sell pension investments and take a pension commencement lump sum as part of entering drawdown. Due to a product charge, Prudential could not process the instruction automatically and placed it for manual processing without notifying Mr G. The instruction was not completed by the following day as Mr G's advisor expected based on previous similar transactions. On 17 March, a unit price adjustment reduced fund values by 11.7%. Although Prudential later assured Mr G in writing that the sale would be valued pre-UPA, the PCLS was ultimately paid using the post-UPA price. The ombudsman upheld the complaint, finding that Prudential's system limitation should not disadvantage Mr G, and directed recalculation of the PCLS using the pricing applicable at the time of instruction submission, with interest.
The Ombudsman's reasoning
The ombudsman found that Mr G's instruction should have been processed using the same timescale as similar transactions, which were consistently completed within 1-2 days. The delay was caused by Prudential's system design requiring manual processing due to a product charge, but Mr G was not informed of this, preventing him from resubmitting the instruction the following day when it would likely have been processed automatically. The ombudsman rejected Prudential's reliance on unpublished internal SLAs, finding that Mr G's reasonable expectations were based on the consistent historical experience of his advisor's other transactions. Additionally, Prudential's written assurance that the sale would be valued at the pre-UPA price, followed by payment at the post-UPA price, constituted misleading information that prevented Mr G from considering cancellation. The ombudsman concluded it was fair and reasonable to recalculate the PCLS using the pricing applicable at the time of instruction submission, as this was when the transaction should have been processed.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Prudential Pensions Limited, all decisions | 8 | 38% |
| Pension transfer advice, all decisions | 7,542 | 54% |
| Pension, all decisions | 15,579 | 47% |
Source
Read the original decision on the Financial Ombudsman Service website