Upheld: unsuitable advice / mis-selling complaint against Wesleyan Assurance Society
Financial Ombudsman decision DRN-6314494 of 2026-05-01T00:00:00+00:00. unsuitable advice / mis-selling complaint against Wesleyan Assurance Society. Outcome: Upheld.
Decision detail
| Reference | DRN-6314494 |
|---|---|
| Decision date | 2026-05-01T00:00:00+00:00 |
| Firm | Wesleyan Assurance Society |
| Product | pension |
| Claim type | unsuitable advice / mis-selling |
| Outcome | Upheld |
| Remedy | Wesleyan must compare the transfer value of the pension assuming contributions had been invested in the Balanced Risk With Profits Fund with the actual transfer value. If the with-profits transfer value exceeds the actual transfer value, Wesleyan must: (1) re-code the policy treating each past contribution as a with-profits contribution, or (2) make a top-up to the pension equivalent to the financial loss, or (3) switch the existing fund into the with-profits fund. Any contribution-based compensation should use available annual contribution allowance (£3,600 gross) in the current tax year, with excess amounts added in subsequent tax years or, with Mr G's agreement, paid into the savings plan. Additionally, Wesleyan must pay £100 to Mr G for distress and inconvenience caused by the unsuitable advice. |
Summary
Mr G sought advice from Wesleyan in November 2022 to invest £500 monthly for his young grandson A's future. Wesleyan recommended a personal pension with £240 monthly contributions invested in a Low Risk/Reward Fund. In April 2025, Mr G complained after receiving a 2024 statement showing the projected fund value at retirement would be less than half the contributions paid in. The Ombudsman found the advice unsuitable because the low-risk fund, expected to grow at only 2.2% annually after charges, would fail to keep pace with the assumed 2.5% inflation rate over the 40+ year investment period. For such a long-term investment, a medium-risk with-profits fund would have been more appropriate and would likely have appealed to Mr G. The Ombudsman upheld the complaint and ordered Wesleyan to provide financial redress by adjusting the pension to reflect what it would have been worth if invested in the with-profits fund, plus £100 for distress and inconvenience.
The Ombudsman's reasoning
The Ombudsman agreed with the Investigator that the advice was unsuitable. The key issue was that a low-risk investment was inappropriate for a very long-term investment beginning in infancy. The relevant attitude to risk should have been A's (the beneficiary), not Mr G's. Critically, the Low Risk/Reward Fund was expected to grow at only 2.2% annually after charges, below the assumed inflation rate of 2.5%, meaning the real value would decline over time. This fundamental unsuitability should have strongly influenced the adviser's recommendation. The Ombudsman found that Wesleyan should have explained that a medium-risk approach provides better balance for long-term investors, with exposure to stock market growth while maintaining some protection. The with-profits fund, with its smoothing mechanism, would have been more suitable and would have appealed to Mr G given his previous negative experience with volatile property investments. The generic warning about inflation in the suitability report did not discharge Wesleyan's obligations to provide suitable advice under COBS rules.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Wesleyan Assurance Society, all decisions | 131 | 42% |
Source
Read the original decision on the Financial Ombudsman Service website