Not upheld: Pension transfer advice complaint against Grove Pension Solutions Limited

Decision detail

Summary

Mr T, age 55, sought advice from Grove Pension Solutions on transferring a DB pension (transfer value £168,556) to a SIPP. He intended to retire at age 59 and sought flexibility in income drawdown and improved death benefits. Grove recommended the transfer based on a critical yield of 2.9% to age 65, which represented good value for money. The transfer was delayed by approximately 12 months due to scheme administration issues, and Mr T complained that the advice was unsuitable for his low risk profile and had caused financial losses. The ombudsman found the transfer was financially viable, Mr T had capacity to accept moderate investment risk through other substantial pensions, and the transfer met his stated objectives. The ombudsman did not uphold the complaint, finding Grove's advice was suitable in the circumstances.

The Ombudsman's reasoning

The ombudsman applied the FCA's starting assumption that DB transfers are unsuitable unless clearly demonstrated to be in the client's best interests. However, the ombudsman found Grove had sufficient contemporary evidence to justify the transfer. The critical yield of 2.9% to age 65 represented good value for money and was likely achievable. The ombudsman accepted Grove's retrospective argument that the critical yield to Mr T's intended retirement age of 59 would have been lower or negative, making the transfer even more viable. Mr T had capacity to accept moderate investment risk given his other substantial pensions, investment experience, and financial position. The transfer met his stated objectives for flexibility, death benefits, and control. While the death benefits were not the most compelling reason, they held legitimate attraction given Mrs T's own pension security. The ombudsman found Mr T was clearly driving the transfer forward based on his own investment experience and intentions, and Grove appropriately did not recommend specific funds. The market turbulence caused by Covid did not alter the suitability assessment given the transfer value remained stable and Mr T continued to demonstrate confidence in proceeding.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website