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.