Not upheld: Pension transfer advice complaint against WPS ADVISORY Ltd
Financial Ombudsman decision DRN-5856633 of 2025-10-22T00:00:00+00:00. Pension transfer advice complaint against WPS ADVISORY Ltd. Outcome: Not upheld.
Decision detail
| Reference | DRN-5856633 |
|---|---|
| Decision date | 2025-10-22T00:00:00+00:00 |
| Firm | WPS ADVISORY Ltd |
| Product | Pension |
| Claim type | Pension transfer advice |
| Outcome | Not upheld |
| Remedy | No remedy ordered. Complaint not upheld. |
Summary
Mr L complained that WPS Advisory Ltd's 2020 advice to remain in his defined benefit occupational pension scheme was unsuitable, claiming he suffered financial loss due to subsequent reduction in transfer value and lost investment growth. Mr L subsequently transferred his DB pension in 2024 on WPS's recommendation and achieved significant investment returns, which he argued demonstrated the 2020 advice was wrong. The ombudsman found the 2020 advice was suitable because Mr L had no immediate income needs, was uncomfortable with investment risk, and the transfer value of £369,644 was significantly lower than the £565,545 cost to replace equivalent guaranteed benefits. The ombudsman rejected assessing suitability based on subsequent investment performance, as this would constitute improper hindsight bias and make it impossible for firms to know if advice was suitable when given.
The Ombudsman's reasoning
The ombudsman applied the FCA's requirement that firms must assume pension transfers are unsuitable unless clearly demonstrated to be in the client's best interests. The ombudsman found that in 2020, Mr L had no immediate income needs, was uncomfortable with investment risk, and had guaranteed income from the DB scheme with RPI revaluation. The transfer value of £369,644 was significantly lower than the £565,545 cost to replace equivalent guaranteed benefits, meaning substantial investment growth would have been required to match the DB scheme's guaranteed benefits within Mr L's three to four year timeframe to retirement. The ombudsman rejected assessing suitability based on subsequent investment returns achieved, as this would be hindsight bias and would make it impossible for firms to know if advice was suitable at the time given. The ombudsman concluded that staying in the DB scheme without material risk was more suitable than transferring and taking significant investment risk to try to match guaranteed benefits.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| WPS ADVISORY Ltd, all decisions | 29 | 41% |
| Pension transfer advice, all decisions | 7,542 | 54% |
| Pension, all decisions | 15,579 | 47% |
Source
Read the original decision on the Financial Ombudsman Service website