Partially upheld: General financial advice complaint against Radiant Financial Planning Limited

Decision detail

Summary

Mr P held an Executive Pension Plan (Plan A) with a guaranteed annuity rate and approached CWB for financial advice only days before his normal retirement date in April 2015. The CWB adviser contacted Provider B to confirm Mr P did not need to take benefits and agreed not to advise on Plan A. However, the adviser failed to inquire about how Plan A funds would be invested after the NRD, and the funds were automatically transferred to a cash deposit fund offering no growth opportunity. Mr P did not discover this transfer until July 2018 and complained that he would have taken benefits at NRD had he been properly informed. The ombudsman upheld the complaint in part, finding CWB failed to adequately investigate Plan A's terms, but rejected Mr P's financial loss claim, finding it unlikely he would have taken benefits even if informed, given his stated circumstances and subsequent inaction. CWB was ordered to pay £450 compensation for inconvenience and distress.

The Ombudsman's reasoning

The ombudsman found that CWB's adviser failed to adequately investigate Plan A and understand what would happen to the funds if Mr P did not take benefits at his NRD. The adviser should have inquired about post-NRD investment arrangements given he was investigating the GAR and enhanced tax-free cash. However, the ombudsman was not persuaded that Mr P would have taken benefits in 2015 even if properly informed. Mr P had no financial need for the funds, had indicated he did not want Plan A advice, and his circumstances did not suggest financial necessity. The ombudsman rejected using hindsight to determine what Mr P would have done, noting that Mr P has still not taken benefits despite knowing since 2018 how the fund is held. While CWB failed in their investigative duty, this did not result in demonstrable financial loss because the GAR increased during deferment and the capital was protected. Compensation was awarded for the inconvenience and distress caused by CWB's failure to properly understand the plan.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website