Upheld: unsuitable investment advice and pension transfer advice complaint against Profile Financial Solutions Limited
Financial Ombudsman decision DRN-6202606 of 2026-04-02T00:00:00+00:00. unsuitable investment advice and pension transfer advice complaint against Profile Financial Solutions Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6202606 |
|---|---|
| Decision date | 2026-04-02T00:00:00+00:00 |
| Firm | Profile Financial Solutions Limited |
| Product | pension - Self-Invested Personal Pension (SIPP) |
| Claim type | unsuitable investment advice and pension transfer advice |
| Outcome | Upheld |
| Remedy | Profile Financial must calculate compensation by comparing the actual value of Mr R's SIPP from the date of initial investment to the date of first switch to conservative portfolio (June 2021) against a fair value benchmark. The benchmark comprises 50% FTSE UK Private Investors Income Total Return Index and 50% average fixed-rate bond rates. Any loss identified must be brought up to date by applying percentage growth of the overall plan. Compensation should be paid into Mr R's pension plan where possible, adjusted for tax relief at his marginal rate. If payment into the pension is not possible, compensation should be paid directly to Mr R with a notional tax reduction applied. Payment must be made within 28 calendar days, with 8% simple interest per annum if payment is delayed. |
Summary
Mr R complained that Profile Financial provided unsuitable advice when recommending a transfer of his personal pension to a SIPP in 2019 and the subsequent investment strategy. While Mr R was assessed as a cautious investor, Profile Financial initially invested him in a 40% equity fund more suitable for a balanced investor. The ombudsman found the transfer advice suitable because it met Mr R's objective to access tax-free cash and offered cost benefits, but upheld the complaint regarding the initial investment strategy being unsuitable for his cautious risk profile. Subsequent portfolio switches from June 2021 onwards were found suitable as they aligned with Mr R's reassessed risk profiles. The ombudsman ordered compensation calculated by comparing actual performance against a 50/50 benchmark of fixed-rate bonds and equity index for the period from initial investment to June 2021.
The Ombudsman's reasoning
The ombudsman found the transfer advice suitable because Mr R had a genuine need to access tax-free cash (which his existing plan did not permit), the SIPP had lower ongoing product charges, and he would likely have incurred a similar initial advice fee when eventually transferring for drawdown purposes. However, the initial investment recommendation into a 40% equity fund was unsuitable for Mr R's cautious risk profile as defined by his questionnaire responses. The subsequent switches from June 2021 onwards were suitable as they aligned with Mr R's reassessed risk profiles at those times. The December 2021 switch to a balanced portfolio, while based on changed questionnaire responses, was considered fair because Mr R was provided with clear information about the change, had opportunity to question it, and could have declined using cancellation rights. The ombudsman rejected arguments that Mr R was pressured or unaware of implications, noting he was given full disclosure and opportunity to object.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Profile Financial Solutions Limited, all decisions | 22 | 46% |
Source
Read the original decision on the Financial Ombudsman Service website