Not upheld: Pension transfer advice complaint against AES Financial Services Ltd

Decision detail

Summary

Ms K complained about AES Financial Services' advice regarding her QROPS pension, specifically challenging an adviser's report dated 9 February 2024 that recommended a cautious risk portfolio with potential losses of 5-7.5%. Ms K had requested lower risk investments before retirement but refused to sign documents she believed misrepresented her risk appetite. After Ms K rejected AES's two options (new risk questionnaire or insistent basis to cash), AES terminated the advisory relationship on 1 March 2024 without providing contractually required one month's notice. The ombudsman found that AES's options were reasonable given Ms K's stated unwillingness to accept investment risk, that no errors in the report caused material harm, and that the lack of notice did not cause detriment as Ms K could have independently switched to cash. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while Ms K reasonably refused to sign documents that did not reflect her actual risk appetite, AES's two options (new risk questionnaire or insistent basis to cash) were reasonable given the impasse. The ombudsman concluded that once Ms K indicated she was unwilling to accept even a 5-7.5% potential loss, the only suitable alternative was cash/deposit assets with no material risk. The ombudsman found that AES could not guarantee lower loss percentages with risk-based investments and was entitled to question suitability. The ombudsman determined that AES's termination of the relationship, while technically not providing one month's notice, did not cause material detriment as Ms K had the opportunity to switch to cash independently. The ombudsman found no evidence that errors or omissions in the 9 February 2024 report caused financial losses to Ms K.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website