The Financial Ombudsman Service has instructed Old Mutual Wealth-owned network Intrinsic to compensate a client who lost money when their pension transfer was delayed.
In September 2016 Mr T found out his pension scheme had a cash equivalent transfer value of just over £780,000 that was guaranteed until mid-December.
In October 2016 Mr T received advice from a firm referred to as ‘D’ which he paid to transfer the scheme into his self-invested personal pension.
Although the transfer forms were completed and D said it sent them to the Sipp providers shortly after this meeting, the Sipp providers did not receive the documentation.
While handling Mr T’s transfer in November 2016, firm D was sold to Intrinsic which acquired all of the customers and took responsibility for the back book liability.
A couple of days before the deadline, the Sipp providers got in touch with Mr T who then made Intrinsic aware the forms had not been received.
Intrinsic said it was chaotic at the time of taking over D so the paperwork was not received in time and the quotation expired.
A new transfer value was requested and the price had decreased by over £30,000 but Mr T continued with the new transfer value as he wanted to invest.
Mr T gave Intrinsic authority to make the transfer on his behalf in early April 2017 but made a complaint to Intrinsic as he lost £30,000.
Intrinsic admitted it made some mistakes but argued it should not take full responsibility as Mr T used to be a financial adviser and should have done more.
Mr T then brought the complaint to FOS whose investigator sided with him as she thought Mr T had been financially disadvantaged due to the lack of actions from Intrinsic.
She asked Intrinsic to put Mr T back into the position he would’ve been in, had the transfer completed in time but Intrinsic disagreed.
In siding with Mr T ombudsman Hayley West explains that it is reasonable for Mr T to expect Intrinsic to ensure the transfer was completed in time.
She says: “By the time Mr T requested a new transfer value, it had dropped by over £30,000. Intrinsic has said because there was a significant drop in transfer values when Mr T requested the new value, it doesn’t think Mr T should’ve gone ahead with this transfer.
“But Mr T only requested a new transfer value as the original transfer didn’t complete in time. And as I’ve explained above, I think that’s the fault of Intrinsic.”
West has ordered Intrinsic to compare the value of the proceeds transferred from Mr T’s OPS currently invested in his Sipp at the date of this decision and the proceeds that should have been transferred under the original quotation.
If there is any difference then Intrinsic should pay the difference.
She adds: “Income tax may be payable on any interest paid. If Intrinsic deducts income tax from the interest it should tell Mr T how much has been taken off.
“Intrinsic should give Mr T a tax deduction certificate if he asks for one, so he can reclaim the tax from HM Revenue & Customs if appropriate.”
A Intrinsic spokeswoman says: “We’re disappointed that the process followed was not up to our usual high standards and will abide by the Ombudsman’s decision. This was an isolated incident and we’re confident that our systems are robust.”