Not upheld: Pension transfer advice complaint against WPS ADVISORY Ltd

Decision detail

Summary

Mr L, aged 44, sought advice from WPS in June 2022 about transferring his DB pension (transfer value £716,500) to a personal pension to achieve flexibility and retire at 57/58. WPS advised him to retain the DB scheme, projecting annual pension benefits of over £37,500 and noting that equivalent benefits would cost over £1,037,000 to purchase. Mr L complained in February 2024 after the transfer value fell to around £300,000 and his employer decided to wind up the scheme. The ombudsman upheld WPS's advice as fair and reasonable, finding no compelling reason for Mr L to transfer at age 44 and noting that his DB pension remained intact with its guarantees despite the fall in transfer value.

The Ombudsman's reasoning

The ombudsman applied the FCA's starting presumption that DB transfers are unsuitable and found WPS was not an order-taker but an adviser required to determine Mr L's best interests. The analysis showed Mr L would need investment growth exceeding £321,000 just to match his DB scheme benefits, providing no compelling reason to transfer. At age 44 with many years to retirement and no firm retirement plans, taking on investment risk was not justified. The ombudsman rejected Mr L's arguments about bias and outdated advice, noting the regulatory presumption against transfers applies regardless of transfer value levels. The fall in transfer value did not make the original advice unsuitable, as Mr L's DB pension remained intact with its guarantees.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website