Upheld: unsuitable advice on pension and ISA withdrawals; failure to identify and prevent pension scam; failure to conduct due diligence on alternative investments complaint against Perspective (South West) Limited
Financial Ombudsman decision DRN-6356025 of 2026-05-13T00:00:00+00:00. unsuitable advice on pension and ISA withdrawals; failure to identify and prevent pension scam; failure to conduct due diligence on alternative investments complaint against Perspective (South West) Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6356025 |
|---|---|
| Decision date | 2026-05-13T00:00:00+00:00 |
| Firm | Perspective (South West) Limited |
| Product | pension and ISA |
| Claim type | unsuitable advice on pension and ISA withdrawals; failure to identify and prevent pension scam; failure to conduct due diligence on alternative investments |
| Outcome | Upheld |
| Remedy | Perspective must: (1) Calculate notional value of Mr C's ISA as if funds remained invested in identical manner prior to withdrawals, treating non-crypto portions as notional withdrawals; (2) Calculate notional value of Mr C's pension similarly, with 50% of post-12 April 2023 crypto-funded withdrawals treated as notional withdrawals; (3) Pay ISA loss directly to Mr C; (4) Pay pension loss into Mr C's pension plan if possible (allowing for charges and tax relief), or if not possible, pay directly with 20% reduction for notional income tax (or 15% if 25% tax-free lump sum available); (5) Add 8% simple interest per year from decision date to settlement date if not paid within 28 days (with extension for delays caused by Mr C providing information); (6) Obtain undertaking from Mr C to account for any recovered Coinmarkets VIP funds; (7) Address any HMRC tax payments not deducted at source (details cut off in provided text). |
Summary
Mr C, a retired moderate risk investor with limited investment knowledge, was targeted by a scammer ('B') who convinced him to invest in what appeared to be cryptocurrency trading on the Coinmarkets VIP platform. Between November 2022 and August 2023, Mr C made multiple withdrawals totalling approximately £199,000 from his pension and ISA managed by Perspective to fund these investments. Perspective advised on the withdrawals without establishing what the alternative investment was, and even after learning it was crypto in April 2023, continued to facilitate withdrawals on a limited tax-efficiency basis only. The crypto platform proved to be entirely fraudulent and disappeared with all of Mr C's invested funds, leaving him facing substantial HMRC tax liabilities. The ombudsman upheld Mr C's complaint, finding Perspective failed to comply with FCA regulations requiring suitable advice and due diligence, and that Mr C would more likely than not have heeded proper advice from his regulated adviser. Perspective was ordered to compensate Mr C for his losses (with 50% reduction for post-April 2023 withdrawals where Mr C failed to mitigate), plus interest and compensation for distress.
The Ombudsman's reasoning
Perspective failed to comply with FCA regulatory obligations (PRIN 2.1.1R, COBS 2.1.1R, COBS 9.2.1R, COBS 9.2.2R) by not obtaining necessary information about the alternative investment before advising on withdrawals. A regulated financial adviser should have insisted on understanding what Mr C intended to invest in before recommending pension and ISA withdrawals. When Perspective eventually discovered crypto investment, it should have advised strongly against this as unsuitable for a moderate risk investor, but instead continued limited advice. The ombudsman found it more likely than not that if Perspective had provided suitable advice from the outset, Mr C would have heeded it, as he demonstrated willingness to follow Perspective's recommendations throughout. Mr C's decision to continue investing after discovering potential scam indicators in April 2023 was unreasonable, so Perspective bears only 50% responsibility for losses after that date. Perspective's subsequent failure to intervene or refuse to facilitate further withdrawals compounded its initial breach.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Perspective (South West) Limited, all decisions | 2 | 50% |
Source
Read the original decision on the Financial Ombudsman Service website