Not upheld: Pension transfer advice complaint against WPS ADVISORY Ltd

Decision detail

Summary

Mr A, over 75 years old, sought to take his occupational pension benefits via a seven-year fixed term annuity with no residual value. WPS initially made this recommendation but subsequently determined it was unsuitable and withdrew it, citing internal policy and FCA Consumer Duty obligations to avoid foreseeable harm. Mr A offered to sign a disclaimer to absolve WPS of responsibility, but the firm declined, classifying him as an insistent client. The ombudsman upheld WPS's decision not to proceed, finding the firm had correctly identified and corrected its initial error. £150 compensation was awarded for the distress caused by the initial unsuitable recommendation.

The Ombudsman's reasoning

The ombudsman found that while WPS made an error in initially recommending the seven-year fixed term annuity with no residual value, the firm correctly identified this as unsuitable and withdrew the recommendation. WPS's policy against recommending such annuities to customers dependent on the income aligns with FCA obligations to avoid foreseeable harm. Mr A qualifies as an 'insistent client' under FCA definitions, and the ombudsman found no basis to direct WPS to facilitate a transaction based on an erroneous recommendation that the firm had already corrected. The £150 compensation for distress and inconvenience caused by the initial error was deemed appropriate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website