Upheld: unsuitable pension transfer advice complaint against Thompson Cavendish Ltd
Financial Ombudsman decision DRN-6288053 of 2026-04-14T00:00:00+00:00. unsuitable pension transfer advice complaint against Thompson Cavendish Ltd. Outcome: Upheld.
Decision detail
| Reference | DRN-6288053 |
|---|---|
| Decision date | 2026-04-14T00:00:00+00:00 |
| Firm | Thompson Cavendish Ltd |
| Product | pension |
| Claim type | unsuitable pension transfer advice |
| Outcome | Upheld |
| Remedy | TCL must: (1) Compare the actual value of Mr G's investment with the notional value had it remained with the previous provider from the date of investment to the final decision date; (2) If the notional value is greater, pay compensation equal to the difference plus interest; (3) Pay compensation into Mr G's pension plan if possible (adjusted for charges and tax relief), or if not possible, pay directly to Mr G with a 15% reduction to account for notional income tax (assuming 20% basic rate tax on 75% of the amount, reflecting potential tax-free lump sum); (4) Pay £200 for distress and inconvenience; (5) Provide clear details of the redress calculation; (6) Pay within 28 calendar days, or pay 8% simple interest per annum on any unpaid loss from the deadline onwards. |
Summary
Mr G sought a pension review from Thompson Cavendish Ltd in June 2024 and was advised to transfer his existing with-profits personal pension to a more flexible arrangement with a higher annual cost (1.62% vs 1.19%), primarily because the existing plan lacked drawdown flexibility. TCL did not discuss or assess Mr G's retirement income needs, capital requirements, or whether his existing plan was performing adequately. Mr G complained in October 2024 feeling rushed and confused about fees, but TCL maintained the advice was suitable. The ombudsman upheld the complaint, finding the transfer unsuitable because TCL failed to properly explore Mr G's retirement needs before recommending a switch to a more expensive plan, and switching solely for flexibility features without demonstrating actual need was insufficient justification. TCL must compensate Mr G by comparing his actual investment performance to what it would have been had he remained with his previous provider, paying any loss plus £200 for distress and inconvenience.
The Ombudsman's reasoning
The ombudsman found that TCL failed to meet its regulatory obligations under COBS and PRIN by not properly exploring Mr G's retirement needs before recommending the transfer. The sole rationale for switching—that the existing plan lacked drawdown flexibility—was insufficient justification, particularly given the increased costs (1.19% to 1.62% annually). Without understanding Mr G's income and capital requirements in retirement, TCL could not reasonably determine whether flexibility was needed or whether the existing plan was already on track to meet his objectives. The ombudsman noted that TCL should have either waited until Mr G's retirement needs were clearer or recommended retention of the existing plan. The assessment of Mr G's attitude to risk as 'Medium' was also questionable given the gaps in understanding his actual needs. The additional cost for ongoing advice was not justified when the fundamental suitability of the transfer itself was in question.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Thompson Cavendish Ltd, all decisions | 2 | 100% |
Source
Read the original decision on the Financial Ombudsman Service website