Not upheld: General financial advice complaint against Wesleyan Assurance Society

Decision detail

Summary

Mr W complained that Wesleyan Assurance Society was charging him a 3% fee each time he wanted to take a £40,000 tax free cash lump sum from his personal pension through Flexi-Access Drawdown. Wesleyan's policy required financial advice and charged 3% for each FAD movement, which Mr W found unfair for subsequent withdrawals. The ombudsman decided not to uphold the complaint, finding that the pension policy terms clearly stated the charge applied to each movement of funds into FAD and that Wesleyan was applying these terms fairly. The ombudsman noted that while the terms may no longer be appropriate for Mr W, the requirement for advice on retirement decisions was reasonable, and Mr W could transfer his pension to another provider without penalty.

The Ombudsman's reasoning

The ombudsman found that the pension policy terms explicitly stated that any request to take Flexi-Access Drawdown would require financial advice and incur a 3% initial advice charge. Each additional movement of funds from the uncrystallised pension pot to FAD would constitute a new FAD movement liable to the charge. While the ombudsman acknowledged that these specific terms may no longer be appropriate for Mr W's needs, the decision to require financial advice for important retirement decisions was not inherently poor, and Mr W had the option to transfer his pension to another provider without penalty.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website