Upheld: unsuitable pension transfer advice and failure to provide agreed ongoing advice services complaint against True Potential Wealth Management LLP (trading as True Potential)

Decision detail

Summary

Mr F complained that True Potential Wealth Management's advice to transfer his pension from Prudential to True Potential Investments was unsuitable and that TPWM failed to provide ongoing advice services he paid for. The ombudsman found that the adviser, Mr C, had predetermined the transfer recommendation before properly assessing Mr F's circumstances, as evidenced by setting up Mr F's profile six months earlier without his knowledge, including transfer rationale in the fact-find prepared in advance, and producing a suitability report on the same day as the fact-find. The ombudsman concluded Mr F did not initiate the discussion and had no genuine need to transfer: he was already drawing sufficient income, his pension was more than double what was needed to meet his objectives, and the primary justification (access to True Potential's app and portal) did not justify the additional annual costs. The complaint was upheld and TPWM was ordered to compensate Mr F by comparing his actual pension value with the notional value had it remained with Prudential, adjusted for tax effects.

The Ombudsman's reasoning

The ombudsman found that the adviser, Mr C, had predetermined the recommendation to transfer before properly assessing Mr F's circumstances. Key evidence included: (1) Mr F's profile being set up six months before any meeting without his knowledge or agreement; (2) the fact-find already containing reasons for recommending a transfer, suggesting it was prepared in advance; (3) a suitability report dated the same day as the fact-find, leaving insufficient time for proper analysis and compliance review; (4) Mr F having transferred another pension into Prudential just two months earlier, contradicting claims he was concerned about its performance; (5) inaccuracies in the fact-find itself; (6) no evidence of a second meeting to present the recommendation as TPWM's own processes required. The ombudsman concluded that Mr F did not initiate the discussion and that the adviser, not Mr F, suggested the transfer. On suitability, the ombudsman found no genuine reason for Mr F to transfer: he was already drawing sufficient income, his pension was more than double what was needed to meet his objectives, he could have adjusted investments within Prudential if concerned about performance, and access to True Potential's app and portal was not a sufficient reason to incur additional costs. The ombudsman rejected TPWM's arguments that the increased cost was justified by superior functionality, noting there was no evidence Mr F wanted or needed such functionality and no meaningful comparison was made between providers.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website