The Financial Ombudsman Service has instructed deVere and Partners (UK) to compensate a client who received unsuitable advice from the company.
deVere and Partners (UK) is a subsidiary of international advice business deVere Group.
In the upheld ruling Mr F complains about the way his Qrops plan has been managed and says the value has gone down.
He also points out he is being asked to pay annual fees of £1,000 and was told there would be penalty charges if he took out his money.
Mr F transferred two existing pensions into a Qrops in 2010 following advice from another business based in Cyprus.
Initially the Qrops was valued at around £61,000 but when Mr F moved back to the UK in 2014 it had lost around £12,000 in value.
In April 2014, Mr F met with deVere UK and its adviser recommended selling all of the investments and reinvesting in a structured note and four funds.
In January 2018, deVere UK told Mr F its minimum fee would be increasing to £1,000 a year and Mr F then said he was not prepared to lose any more of his pension through paying fees.
He said he wanted to move to another provider, but adds he was told he would have to pay fees of around £14,000 to do so.
FOS’s investigator could not consider anything that happened in Cyprus but he did investigate the recommendation to switch investments in April 2014 and concluded Mr F should be compensated.
He thought the recommendation was not suitable for Mr F given his circumstances and attitude to risk.
The investigator recommended compensation based on a benchmark of 50 per cent from FTSE UK Private Investors Income Total Return Index and 50 per cent average rate from fixed rate bonds.
But deVere UK disagreed and argued it is a matter of opinion where a portfolio falls on the risk scale.
Furthermore Mr F expressed his satisfaction with the UK adviser and his complaint is about the losses made before responsibility was passed to deVere UK.
In response Mr F said he wants the money back he has lost and does not want to pay any fees for moving to a new provider.
He also claims he was told at the outset he would not be charged any fees and adds any fee should be charged as a percentage of profit made.
The complaint was passed onto ombudsman Elizabeth Dawes who says it is right to consider whether the advice he received from April 2014 onward was suitable.
Although deVere UK has explained why it thinks this recommendation was in line with Mr F’s attitude to risk, Dawes says he was actually more cautious and the recommendation was not suitable for his circumstances.
That is because Mr F didn’t have any other investments, his pension investment was relatively modest and he was unemployed since moving back to the UK.
He had also reacted strongly in the past to losses in his investment, showing that he was very uncomfortable with any loss in value of his investment.
To make amends, deVere UK is required to compensate Mr F according to the benchmark outlined by the ombudsman.
Mr F should have the details of deVere UK’s calculation presented to him in a clear and simple format.
A deVere UK spokesman says: “We are disappointed by the ombudsman’s decision in this case but will abide by it.”