Upheld: unsuitable pension switching advice complaint against Fairstone Wealth Management Limited
Financial Ombudsman decision DRN-6329528 of 2026-04-30T00:00:00+00:00. unsuitable pension switching advice complaint against Fairstone Wealth Management Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6329528 |
|---|---|
| Decision date | 2026-04-30T00:00:00+00:00 |
| Firm | Fairstone Wealth Management Limited |
| Product | pension |
| Claim type | unsuitable pension switching advice |
| Outcome | Upheld |
| Remedy | Fairstone must: (1) Compare the actual value of Ms H's SIPP investment as at the date of final decision against a notional value if all existing pensions had been consolidated into the Aviva plan as at the date of the Aviva plan switch; (2) If the notional value exceeds the actual value, pay compensation equal to the loss plus interest; (3) Pay compensation into Ms H's pension plan if possible (adjusted for charges and tax relief), or if not possible, pay directly to her with a 20% reduction for notional income tax (or 15% if tax-free lump sum available); (4) Use the FTSE UK Private Investors Income Total Return Index as benchmark if Aviva cannot calculate notional value; (5) Pay £500 for distress and inconvenience (already offered by Fairstone); (6) Pay within 28 calendar days or face 8% simple interest per annum on any unpaid loss. |
Summary
Ms H, aged 57 and self-employed, sought advice from Fairstone about her pensions in November 2023. Fairstone recommended switching her existing pensions (primarily a £400,407 Aviva plan) to a SIPP with ongoing advice, citing improved flexibility and investment performance. Ms H complained after the July 2024 switch, alleging she was rushed, misled about Aviva's drawdown capabilities, and paying excessive fees. The ombudsman upheld the complaint, finding the advice unsuitable because the additional 0.8% ongoing advice cost was not justified given Ms H had no immediate retirement plans, the Aviva plan already offered ad hoc drawdown (which Fairstone failed to mention), and Ms H did not seek or need ongoing advice. The ombudsman ordered Fairstone to compensate Ms H by comparing her actual SIPP value against a notional value had she consolidated into Aviva, plus £500 for distress.
The Ombudsman's reasoning
The ombudsman found the advice unsuitable because: (1) Fairstone failed to properly assess whether Ms H's existing Aviva plan met her needs before recommending a switch; (2) the additional cost of the SIPP arrangement (primarily the 0.8% ongoing advice charge) was not adequately justified given Ms H's circumstances; (3) Ms H had no genuine need for flexible drawdown access at the time of advice and was not planning to retire imminently, yet the Aviva plan already offered ad hoc drawdown which Fairstone failed to mention; (4) Ms H was not a vulnerable client requiring ongoing advice support, and there was no evidence she sought or wanted such ongoing advice; (5) the SIPP would be worth less than the Aviva plan at age 67 with the same growth assumptions; (6) the Aviva plan was already appropriately aligned with her balanced risk profile; (7) suitable advice would have been to consolidate the existing pensions into the Aviva plan, which was a lower-cost alternative meeting her objectives.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Fairstone Wealth Management Limited, all decisions | 6 | 58% |
Source
Read the original decision on the Financial Ombudsman Service website