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Intrinsic pays redress over pension transfer advice complaint

Intrinsic must compensate a client for the pension transfer advice it gave them.

According to a Financial Ombudsman Service decision, in 2015 Mrs C was told to transfer her two existing personal pensions valued around £80,000 to a new Sipp provider.

This money was placed in a scheme where Mrs C could adopt a dynamic attitude to risk.

However Mrs C says she received little documentation regarding the recommendation including the charges that would apply.

She was concerned about the advice and complained to Intrinsic, which did not uphold the complaint that was referred to FOS.

A FOS adjudicator investigated the complaint and recommended it be upheld for several reasons.

He noted a suitability letter had been issued with the correct address and could see no reason why Mrs C did not receive it.

However, he said the change to a riskier investment approach should have been questioned in more detail as Mrs C’s previous funds were balanced.

This was especially relevant as Mrs C’s responses to various questions to work out her attitude to risk were inconsistent.

The adjudicator said the suitability letter made reference to providing a further letter detailing costs and a charges comparison yet Mrs C did not receive it even after making follow up requests to Intrinsic.

He added this would have been an important document and allowed Mrs C to make an informed decision on whether to transfer or not.

It was relevant given the additional costs associated with the new Sipp.

Overall the adjudicator felt the advice to transfer was unsuitable and put forward redress for Intrinsic to consider.

Intrinsic disagreed with the findings and the benchmark proposed, which it felt was inappropriate, so the complaint was passed to ombudsman Ivor Graham.

Graham sided with the adjudicator and said when a transfer is recommended it is imperative the consumer understands the advice.

No evidence was provided to show Mrs C would have been able to make cost comparisons between her existing arrangements and the transfer to the new provider, he adds.

Graham agrees with the adjudicator that this information would have been vital, and does not appear to have been provided.

In assessing what would be fair compensation, Graham says his aim is to put Mrs C as close to the position she would probably now be in if she had not been given unsuitable advice.

To compensate Mrs C, Intrinsic should compare the performance of Mrs C’s investment with the FTSE WMA Stock Market Income Total Return Index benchmark.

It should then pay the difference between the fair value and the actual value of the investment and £250 for the upset caused.

Intrinsic declined to comment.

In February Intrinsic was told to compensate one client over a Sipp transfer to Harlequin and another over a delayed pension transfer.



Intrinsic pays redress after adviser recommends pension switch without speaking to client first

Intrinsic has compensated a client after one of its appointed representatives recommended a pension switch based solely on a fact find and risk questionnaire carried out by another employee and without speaking to the client first. A letter from Intrinsic about the complaint, seen by Money Marketing, outlines the compensation that will be paid, which […]


FOS penalises Intrinsic over Sipp transfer to Harlequin

The Financial Ombudsman Service has ruled against Intrinsic Financial Planning over a client who switched his personal pension to a self-invested personal pension in order to invest in Harlequin. Mr A complains that he received unsuitable advice from an appointed representative of Intrinsic to switch his personal pension to a Sipp. When the transfer was […]


FOS penalises Intrinsic for delayed pension transfer

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 the case Mr T complains the delayed transfer of his Occupational Pension Scheme resulted in him receiving a lower transfer value than originally quoted. In September 2016 Mr T found […]


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There are 3 comments at the moment, we would love to hear your opinion too.

  1. Is that really the right index for someone suggesting she has a risk adversity? And as ever with these things, an index has zero charges so why doe the Ombudsman never allow for the charges that an investor would suffer when considering comparative performance? The Ombudsman is not there to profit the complainant but to put them in the position if errant advice had not been given. Deducting 1.5%pa say would be equitable. If it feels the investor has been distressed then it should make an appropriate award for that but not a fee-free alternative. (It is the same reason why the 8% interest allowance used is inequitable and needs review).

  2. IMO, inconsistency in ATR responses is worrying.

    Sounds as if it was not followed up.

  3. It does highlight the fact that FOS knows very little about how the finance industry works and why they are in so much trouble.

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