Not upheld: Pension transfer advice complaint against NFU Mutual Select Investments Limited

Decision detail

Summary

Mr P complained that NFU Mutual failed to adequately warn him of pension scam risks and conduct proper due diligence when processing his transfer of approximately £45,000 from his personal pension to a QROPS in Gibraltar in September 2014. Mr P had received advice to transfer from WJA, an FCA-authorised firm, and subsequently lost money when the transferred funds were invested in schemes that failed. The FSCS upheld Mr P's complaint against WJA in 2017. Mr P argued NFU Mutual should have provided the Scorpion insert warning of scams and followed the Scorpion action pack checklist for due diligence. The ombudsman found that whilst NFU Mutual should have sent the Scorpion insert and conducted due diligence as a matter of good industry practice, even full compliance would not have prevented the transfer, as the only warning sign present (overseas investment) was not unusual for a QROPS and Mr P's receipt of regulated advice would have provided reassurance. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman established that whilst the Scorpion guidance was non-binding and advisory in nature, it marked an inflection point in February 2013 for what was expected of personal pension providers as a matter of good industry practice and fulfilling duties under FCA Principles and COBS 2.1.1R. The ombudsman found that firms should have sent the Scorpion insert to transferring members and conducted due diligence using the action pack checklist where warning signs were present. However, the ombudsman concluded that even if NFU Mutual had followed all these steps, it would have identified only one feature from the checklist (overseas investment), which alone would not have been unusual for a QROPS. Critically, NFU Mutual would have confirmed that Mr P was receiving advice from a regulated firm (WJA), which would have provided reassurance and meant the transfer would have proceeded anyway. Therefore, the breach of good practice would not have changed the outcome.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website