Upheld: unsuitable pension transfer advice / failure to consider alternatives / inadequate suitability assessment complaint against Harbour Rock Capital Limited (trading as Portafina)
Financial Ombudsman decision DRN-6250008 of 2026-04-02T00:00:00+00:00. unsuitable pension transfer advice / failure to consider alternatives / inadequate suitability assessment complaint against Harbour Rock Capital Limited (trading as Portafina). Outcome: Upheld.
Decision detail
| Reference | DRN-6250008 |
|---|---|
| Decision date | 2026-04-02T00:00:00+00:00 |
| Firm | Harbour Rock Capital Limited (trading as Portafina) |
| Product | pension |
| Claim type | unsuitable pension transfer advice / failure to consider alternatives / inadequate suitability assessment |
| Outcome | Upheld |
| Remedy | Portafina must calculate compensation by comparing the actual value Mr H received (£25,054 after tax and charges) with a fair value benchmark. The fair value should be calculated using: for half the investment, the FTSE UK Private Investors Income Total Return Index; for the other half, the average rate from fixed rate bonds published by the Bank of England. The comparison should disregard the adviser's fee entirely. If fair value exceeds actual value, compensation is payable plus 8% simple interest per year from the end date to settlement. Compensation should be paid within 28 calendar days. If paid directly to Mr H (rather than into a pension plan), the amount should be reduced by 15% to notionally allow for income tax (20% reduction on 75% of compensation to account for tax-free lump sum entitlement). |
Summary
Mr H, aged 55, sought advice from Portafina in March 2023 to access his pension funds for home improvements and debt repayment, anticipating redundancy within five months. Portafina recommended transferring his entire pension to a new provider and encashing the full fund, charging a £2,008 fee. Mr H later complained that he was not informed he could access tax-free cash directly from his existing pensions without transferring. The ombudsman upheld the complaint, finding the transfer recommendation unsuitable because Portafina failed to consider alternative access methods, did not adequately factor in the imminent £10,000 redundancy payment, and failed to properly assess retirement income risks if Mr H's significantly older wife predeceased him. The advice resulted in unnecessary tax liabilities and fees. Portafina must compensate Mr H by comparing actual value received against a fair value benchmark using a 50/50 split between fixed-rate bonds and equity indices, with 8% simple interest on any loss.
The Ombudsman's reasoning
The ombudsman found the transfer recommendation unsuitable because: (1) Portafina failed to consider alternative methods of accessing benefits such as partial crystallisation or UFPLS from existing arrangements, which could have met Mr H's immediate objectives without a transfer; (2) the advice did not properly account for Mr H's vulnerability if his wife predeceased him, given the 18-year age gap and dependence on her pension income; (3) the imminent and confirmed redundancy payment of £10,000 was not adequately factored into the suitability assessment, as it could have substantially met his stated objectives; (4) the work required was not urgent or time-bound, with incomplete quotes suggesting it was 'nice to have' rather than critical; (5) as an inexperienced investor, Mr H would likely have followed a suitable professional recommendation against full encashment; (6) the transfer resulted in unnecessary tax liabilities and fees that could have been avoided; and (7) pension freedoms do not justify bypassing proper suitability assessments, which become more important given the potential for irreversible decisions.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Harbour Rock Capital Limited (trading as Portafina), all decisions | 2 | 50% |
Source
Read the original decision on the Financial Ombudsman Service website