The Financial Ombudsman Service has upheld a complaint against Mattioli Woods for unsuitable pension investment advice.
The widow of a former client complained her husband was given unsuitable advice to transfer funds from a personal pension to a Sipp.
He was then advised to invest £10,000 of the funds into a property syndicate. The remainder of the fund, £276,000, was used to repay part of a mortgage on a commercial property within the Sipp.
She argued given her husband’s state of health, he should not have been advised to transfer. She was unable to access any benefits from the pension.
The FOS ruled the recommendation to invest in the property syndicate was unsuitable as it reduced the fund’s liquidity.
Ombudsman Roy Milne said in the final decision: “The property syndicate was an unregulated investment with liquidity risks.
“This has caused significant distress and inconvenience to Mrs D because she has not been able to take income from the Sipp.”
The FOS has ordered Mattioli Woods to pay £500 for distress and inconvenience, as well as the difference between the value of the £10,000 invested in the syndicate and its value if it had been invested with a return equivalent to the Bank of England fixed return index.
But Mattioli Woods says this calculation results in no loss.
Mattioli Woods operations director Mark Smith says: “The FOS agreed with the rationale for transferring the investment, and the client’s widow has not been disadvantaged financially.”
Highclere Financial partner Alan Lakey says: “An illiquid investment is only unsuitable if it represents an inappropriately high proportion of the total fund.”