Not upheld: failure to provide advice on pension legislative changes; delay in returning borrowed ISA funds complaint against Schroders Personal Wealth (SPW), now trading as Lloyds Wealth Management Limited

Decision detail

Summary

Mr C complained that SPW misled him about the advice service he would receive on his SIPP when he moved from Lloyds in 2021, and failed to advise him about Lifetime Allowance changes in 2024 that contributed to delays in withdrawing £173,000 from his SIPP for a property purchase. Due to these delays, Mr C withdrew funds from his ISA on 16 August 2024 and was out of the market until 26 November 2024, suffering investment losses. The ombudsman found that SPW should have mentioned the Lifetime Allowance changes in its May 2024 advice review but concluded that even with earlier notification, Mr C would likely not have received his SIPP funds in time for his deadline. The ombudsman also found that the adviser's suggestion to delay ISA reinvestment did not result in unreasonable delays. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman acknowledged SPW's failing in not informing Mr C about the Lifetime Allowance legislative changes in the May 2024 advice review. However, the ombudsman found that even if SPW had informed Mr C earlier, he likely would not have received his SIPP funds before his property purchase deadline. James Hay confirmed the TTFAC could only be applied for after the withdrawal request was made, and the time saved would have been approximately one week, still insufficient to meet the end-of-July deadline. The ombudsman found Mr C likely made the withdrawal request when he knew he needed the funds and would not have brought this forward with earlier knowledge of the pension changes. Regarding the ISA return delay, the ombudsman found it reasonable for the adviser to wait for Mr C's instructions and that the timeframes for arranging a meeting and processing the reinvestment were not excessive. Although the adviser suggested postponing the return until January 2025, Mr C's email expressing concern led to a swift recommendation report issued two working days later, with funds returned and reinvested within reasonable timeframes.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website