Not upheld: Pension transfer advice complaint against HARBOUR ROCK CAPITAL LIMITED

Decision detail

Summary

Mr F, aged mid-fifties with a DB pension worth £283,473 providing guaranteed income of £18,400 per annum, sought advice from Harbour Rock about accessing tax-free cash. Although Harbour Rock recommended against transfer, it facilitated Mr F's insistent client request and the transfer completed in May 2020. The ombudsman found Harbour Rock's process was flawed and failed to meet regulatory obligations under PRIN and COBS, including presupposing a transfer outcome and normalising the insistent client route. However, the complaint was not upheld because Mr F's subsequent decision to withdraw the entire remaining pension fund in December 2020 despite incurring approximately £96,000 in tax demonstrated he was strongly motivated to access the funds regardless of financial costs, suggesting he would have transferred anyway even with proper advice.

The Ombudsman's reasoning

The ombudsman acknowledged significant regulatory failings by Harbour Rock in its insistent client process, including presupposing a transfer outcome in the Welcome Letter, normalising the insistent client route before providing advice, and presenting the insistent client option simultaneously with the recommendation against transfer. However, the ombudsman found that causation was not established because Mr F's subsequent behaviour demonstrated he was strongly motivated to access pension funds regardless of financial costs. Specifically, Mr F's decision to withdraw the entire remaining pension fund only months later despite incurring approximately £96,000 in tax indicated he was willing to bear significant costs to access the money, suggesting he would have transferred anyway even with a robust insistent client process. The ombudsman rejected the argument that this analysis constituted impermissible hindsight, reasoning that Mr F's post-transfer conduct revealed his underlying motivations at the time of the original transfer decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website