Not upheld: unsuitable pension switching advice complaint against Lighthouse Advisory Services Limited trading as Quilter

Decision detail

Summary

Mr S, aged 58 and self-employed, sought pension advice in 2011 while undertaking a property conversion project with limited savings and no income. He wanted to access approximately £20,000 in tax-free cash from his pension without taking income. Lighthouse advised him to switch from Prudential pensions to a MetLife Retirement Portfolio with a Secure Income Guarantee, which allowed flexible access to tax-free cash and provided protection against market volatility. Mr S's representatives complained in 2025 that the advice was unsuitable due to higher charges and unnecessary guarantee features. The ombudsman found the switch was necessary to meet Mr S's primary objective, the MetLife plan was suitable given his stated priority for security and his moderate conservative risk profile, and the additional charges for the guarantee were reasonable and clearly explained.

The Ombudsman's reasoning

The ombudsman found that switching was necessary to meet Mr S's primary objective of accessing tax-free cash without taking income, which his Prudential pensions did not allow. The MetLife plan was suitable because it provided the flexibility he needed, offered a Secure Income Guarantee aligned with his stated priority for security and protection, and the recommended Defensive Index Portfolio matched his moderate conservative attitude to risk. While charges were higher, the additional cost for the guarantee feature was reasonable and clearly explained, and the fund and management charges (0.93%) were actually slightly lower than his previous costs (1%). The ombudsman rejected arguments that cheaper alternatives should have been explored, noting that the MetLife plan met Mr S's objectives of stability and security, and that at the time of advice there was a reasonable prospect of investment gains after charges.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website