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

Decision detail

Summary

Mrs F, aged 55, sought to access her DB pension to raise £9,000 for debt repayment and home repairs, plus holiday funds. GPS advised her not to transfer, explaining she would lose guaranteed benefits and could lose £13,000+ in retirement income, and that she could instead take a £9,000 loan at £182/month. Despite this clear advice, Mrs F insisted on proceeding. GPS facilitated the transfer after checking her understanding. Mrs F later complained via a CMC that the advice was unsuitable. The ombudsman rejected the complaint, finding GPS's advice was suitable and clearly communicated, and that Mrs F made an informed decision to proceed against the advice as an insistent client.

The Ombudsman's reasoning

The ombudsman found that GPS started with the correct assumption that DB transfers are unsuitable and provided clear, suitable advice not to transfer. The advice explained the guaranteed benefits Mrs F would lose, the critical yield required (11.25%), and provided a monetary illustration showing she could lose £13,000+ in retirement income. GPS also demonstrated Mrs F could achieve her objectives by taking a £9,000 loan at £182/month, significantly cheaper than the pension loss. Although GPS's process had some shortcomings (not obtaining full details of other pensions, limited income analysis), the ombudsman concluded these would not have changed Mrs F's decision. Mrs F approached GPS with a specific plan, received clear advice against it, and independently decided to proceed. The ombudsman was satisfied Mrs F understood the consequences and made an informed decision to proceed against advice.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website