The Financial Ombudsman Service has ordered HSBC to repay trail commission to a client who did not receive ongoing advice.
The bank was ordered to repay the 0.5 per cent trail commission and £350 for stress and inconvenience in a FOS final decision notice issued in August but only published this week.
Mr J had transferred his pension to HSBC in August 2006 in unsecured drawdown. He took his tax-free cash between 2006 and 2008 and left the rest invested.
In 2009, Mr J contacted the bank to ask for advice about withdrawals but complained of poor service and an inability to get a review.
In April 2013, HSBC acknowledged it had not met expectations. In December 2013 it offered to refund all trail commission from 2009 – when the tax-free payments stopped – plus a gesture for stress and inconvenience.
Mr J rejected the offer as derisory and demanded a full refund of trail.
FOS has instructed HSBC to repay all trail but it can retain its initial adviser commission for setting up the transfer.
Ombudsman David Ashley says HSBC had not provided an “appropriate” level of service.
He said: “Having moved his not inconsiderable pension funds to HSBC to ensure an adequate income in retirement, he was effectively left to fend for himself. Attempts to gain a review at a time when it was most needed proved unsuccessful.
“So although I accept that the first two payments of tax free cash were paid, I agree with the adjudicator that largely, no further service was provided after the contract had been arranged.”