Partially upheld: pension advice failure and triggering of Money Purchase Annual Allowance without informed consent complaint against Harney & Co Independent Financial Advisers
Financial Ombudsman decision DRN-6251428 of 2026-05-26T00:00:00+00:00. pension advice failure and triggering of Money Purchase Annual Allowance without informed consent complaint against Harney & Co Independent Financial Advisers. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6251428 |
|---|---|
| Decision date | 2026-05-26T00:00:00+00:00 |
| Firm | Harney & Co Independent Financial Advisers |
| Product | pension |
| Claim type | pension advice failure and triggering of Money Purchase Annual Allowance without informed consent |
| Outcome | Partially upheld |
| Remedy | Harney & Co must: (1) Repay all ongoing adviser fees deducted from Mr H's SIPP from 1 August 2023 until cancellation, together with simple interest at 8% per annum from the date fees were paid to settlement; (2) Apply a notional tax reduction of 15% to the refunded fees (20% reduction on 75% of compensation to account for tax-free lump sum entitlement); (3) Pay £2,000 compensation for distress and inconvenience if not already paid; (4) Provide Mr H with a simple calculation showing how figures were worked out; (5) Provide tax deduction certificate for interest if requested. |
Summary
Mr H complained that Harney & Co triggered the Money Purchase Annual Allowance (MPAA) without his knowledge when arranging a taxable income payment to cover a shortfall in tax-free cash from his SIPP in August 2023, restricting his future pension contributions from £60,000 to £10,000 annually. The firm subsequently provided ongoing advice recommending contribution increases that would exceed the MPAA limit without recognising the changed circumstances. While the ombudsman found the MPAA trigger could not be reversed and rejected Mr H's claimed investment losses (as contributions diverted to his wife Mrs H mitigated losses and family-based retirement planning is reasonable), the complaint was partially upheld. The ombudsman ordered Harney & Co to refund all ongoing adviser fees from August 2023 onwards with 8% simple interest, apply a notional 15% tax reduction, and pay £2,000 compensation for distress and inconvenience.
The Ombudsman's reasoning
The ombudsman found that while the MPAA trigger cannot be reversed, Harney & Co's failure to understand Mr H's changed circumstances after August 2023 meant subsequent advice was not suitable. The firm continued charging ongoing advice fees without recognising that recommended contribution levels would exceed the MPAA limit. The ombudsman rejected Mr H's claimed investment losses, finding that contributions diverted to Mrs H mitigated potential losses and that it is reasonable to consider retirement planning on a family basis. The ombudsman noted that Mrs H could access benefits at approximately the same time as Mr H's intended retirement, and that Corporation Tax deductions were obtained through contributions for Mrs H. The ombudsman upheld the refund of ongoing advice fees with 8% simple interest and the £2,000 compensation for distress and inconvenience, but rejected claims for additional investment losses.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Harney & Co Independent Financial Advisers, all decisions | 1 | 50% |
Source
Read the original decision on the Financial Ombudsman Service website