Upheld: unsuitable pension transfer advice - excessive ongoing charges complaint against Harbour Rock Capital Limited
Financial Ombudsman decision DRN-6320114 of 2026-05-07T00:00:00+00:00. unsuitable pension transfer advice - excessive ongoing charges complaint against Harbour Rock Capital Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6320114 |
|---|---|
| Decision date | 2026-05-07T00:00:00+00:00 |
| Firm | Harbour Rock Capital Limited |
| Product | pension (SIPP) |
| Claim type | unsuitable pension transfer advice - excessive ongoing charges |
| Outcome | Upheld |
| Remedy | HRC must compare the value of Mr E's current pension plan as at the date of the final decision with the notional return it would have received had the ongoing advice charges not been deducted from the fund. If there is a loss to Mr E, it should be paid into his pension plan in the first instance (accounting for tax relief and charges), or if not possible, paid directly to him with a notional deduction for income tax at 20%. Payment must be made within 28 days, with interest at 8% simple per annum if not paid by the deadline. |
Summary
Mr E, aged 61, approached HRC after seeing an advertisement and requested a review of his pensions. He had three Royal London pensions (£83,930) and a Nest pension (£5,577), with objectives to access tax-free cash to clear £2,500 credit card debt and fund home improvements. HRC recommended transferring all pensions to an Aegon SIPP invested in the Composed Portfolio, charging an initial fee of £4,780.31 (5.34% of the fund) plus ongoing annual charges of 0.2% AMC and an optional 1% ongoing advice service fee. Mr E accepted and completed the transfer in October 2022. He complained in July 2025 that the advice was unsuitable due to higher costs and lack of clear benefits. The ombudsman upheld the complaint, finding that while the initial transfer was suitable given Mr E's objectives, the ongoing 1% annual advice fee was unjustified given the modest fund size, limited time to retirement, and the fact that the Composed Portfolio was a standard managed fund requiring no active ongoing management. HRC must calculate and pay any loss resulting from the unjustified ongoing charges.
The Ombudsman's reasoning
The ombudsman found that while the principle of transferring to access tax-free cash was suitable given Mr E's clearly stated objectives and his proactive approach to HRC, the ongoing advice charges were not justified. Although the initial transfer fee was substantial (5.34% of the fund), Mr E's objectives were not unreasonable and he had approached HRC voluntarily. However, the ongoing 1% annual advice fee was unjustified because: (1) Mr E had a modest pension fund with limited time to recover costs before retirement; (2) the Composed Portfolio was a standard managed fund that did not require ongoing active management; (3) Mr E's circumstances were unlikely to change materially, and any future changes (such as accessing benefits) could be addressed on a one-off basis when they arose; (4) a lifestyling fund could have addressed any derisking needs as he approached retirement; (5) the annual fee of approximately £700 would have a significant impact on a fund of around £84,000. The ombudsman rejected HRC's arguments that ongoing advice was necessary for clients approaching drawdown, noting that Mr E had not yet begun taking income and could seek advice when needed.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Harbour Rock Capital Limited, all decisions | 55 | 55% |
Source
Read the original decision on the Financial Ombudsman Service website