Partially upheld: Pension transfer advice complaint against Pension Works Limited

Decision detail

Summary

Mr R complained that Pension Works Limited (PWL) provided unsuitable abridged advice on his defined-benefit pension transfer and caused delays that resulted in a lower cash equivalent transfer value (CETV). Mr R's original CETV of £111,115 expired in March 2022 (extended to 6 April 2022). PWL took until 28 July 2022 to provide abridged advice recommending Mr R remain in the scheme. Mr R subsequently engaged another firm which recommended transfer, and he obtained a new CETV dated 2 September 2022 valued at £87,327, a reduction of £23,788. The Ombudsman found PWL caused delays by requesting excessive information not necessary for abridged advice and failing to chase information from the DB scheme trustee promptly. However, the Ombudsman found that even with prompt delivery, Mr R could not have secured the original CETV as full advice would still have been required and would have taken time to complete. The Ombudsman rejected financial loss compensation as it cannot be speculated whether a higher CETV would have been obtained at an earlier date, and found PWL's advice to remain in the DB scheme was reasonable. The complaint was upheld in part with £250 compensation awarded for inconvenience caused by delays.

The Ombudsman's reasoning

The Ombudsman found that PWL requested excessive information at the abridged advice stage, particularly detailed information about DC schemes that was weighted towards full advice requirements rather than abridged advice. PWL should have been able to deliver abridged advice based on pension statements and basic information that Mr R could have provided. PWL failed to chase information from the DB scheme trustee promptly and missed responses that had been provided. The Ombudsman calculated that PWL should have delivered abridged advice by 6 April 2022 rather than 28 July 2022. However, the Ombudsman found that even with prompt delivery, Mr R could not have secured the original CETV as full advice would still have been required and would have taken time to complete, meaning the CETV would have expired regardless. The Ombudsman rejected speculation about whether a higher CETV would have been available at an earlier date as CETVs are based on complex calculations and vary unpredictably. The Ombudsman found PWL's advice to remain in the DB scheme was reasonable given Mr R had no urgent need to transfer, had substantial other resources, and the CETV had expired.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website