Not upheld: Pension transfer advice complaint against Pension Works Limited

Decision detail

Summary

Mr H, aged 57, sought advice from Pension Works on transferring two DB pensions worth approximately £625,000 to a SIPP to fund his plan to reduce working hours and retire at 62. Pension Works recommended he remain in the DB schemes, finding he could achieve his objectives by supplementing reduced income with his £185,000 DC pension. Mr H complained the advice was unsuitable and that he should have been informed about the insistent client process. The ombudsman upheld Pension Works' recommendation, finding it reasonable given Mr H's circumstances, the FCA's guidance that DB transfers are unsuitable for most consumers, and the firm's clear communication of its process and policy not to proceed against its own advice.

The Ombudsman's reasoning

The ombudsman applied the FCA's starting position that for most consumers, transferring from a DB scheme with safeguarded benefits is unsuitable. Pension Works was required to demonstrate why a transfer would be in Mr H's best interests. The ombudsman found that Pension Works conducted a comprehensive fact-find, explored viable alternatives to transferring (using the DC pension to supplement reduced income), and clearly explained upfront that there were only two possible outcomes from the abridged advice process. The ombudsman was satisfied that Pension Works' recommendation to remain in the DB schemes was reasonable given Mr H could achieve his objectives without transferring, and that the firm clearly communicated its policy not to proceed on an insistent client basis both verbally and in writing.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website