Not upheld: pension transfer advice - suitability and process compliance complaint against Smith & Pinching Financial Services Limited

Decision detail

Summary

Mr I complained to SPFSL about advice received in 2006 regarding a transfer of his deferred defined benefits occupational pension scheme to a personal pension. SPFSL had advised against the transfer but Mr I insisted on proceeding. SPFSL issued letters on 10 May and 15 May 2006 clearly stating its advice not to transfer and recommending specific investments based on Mr I's attitude to risk. The transfer proceeded and Mr I later complained in November 2024, approximately 18 years later. The ombudsman found that SPFSL complied with the applicable COB 5.3.25R rules by providing clear written advice against the transfer, reconfirming this advice, and obtaining confirmation from Mr I that he wished to proceed despite the advice. The ombudsman concluded that Mr I made an informed decision to proceed against SPFSL's advice and that the firm acted in accordance with the relevant rules in force at the time, therefore the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the COB rules in force in 2006, specifically COB 5.3.25R which required firms to make a clear record of advice not to proceed and the customer's instructions to proceed, and to provide written confirmation that the advice was not to proceed. SPFSL satisfied these requirements by issuing clear written advice against the transfer on 10 May 2006 and reconfirming this position on 15 May 2006. The 15 May letter referenced confirmation received from Mr I on 12 May that he understood the risks and wished to proceed. Although SPFSL could not produce the original written confirmation from Mr I, the ombudsman found on balance of probabilities that such confirmation was likely received, given the explicit reference to it in the follow-up letter. The investment recommendations were suitable given Mr I's stated attitude to risk and his age (48) at the time. The ombudsman concluded that Mr I made an informed decision to proceed against SPFSL's advice and that the firm acted in accordance with the relevant rules.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website