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

Decision detail

Summary

Mr M, aged 54 and in poor health with reduced life expectancy, sought advice from Grove in 2016 regarding transferring his deferred DB pension. Mr M was receiving universal credit benefits with no disposable income and wanted to access approximately £6,000 for home decoration, a family holiday, and emergencies. Grove advised the transfer to Royal London, despite a critical yield of 7.41% being significantly higher than reasonably achievable investment returns. The suitability letter contradictorily stated the yield was achievable while warning that pension provision would suffer. Mr M subsequently withdrew all transferred funds by August 2016. He complained in March 2023, and while the ombudsman found the advice unsuitable, it was not upheld because evidence showed Mr M would have transferred and withdrawn all funds anyway, making Grove's unsuitable advice not the cause of his losses.

The Ombudsman's reasoning

The ombudsman found that while Grove's advice was unsuitable (the critical yield of 7.41% was materially higher than reasonably achievable rates, the suitability letter was contradictory, and the reasons for transfer were inadequate to justify the loss of DB guarantees), Grove was not responsible for Mr M's losses. This is because the evidence demonstrates that Mr M would have transferred his DB pension anyway, regardless of Grove's advice. The initial enquiry form showed Mr M was already considering accessing the entire pension fund, and his subsequent actions (withdrawing all funds despite Grove's recommendation to retain and invest the remainder) demonstrated his determination to access the cash. Since Mr M had the legal right to insist on a transfer even if advised against it, and the evidence supports that he would have exercised this right, Grove's unsuitable advice was not the cause of his losses.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website