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Nic Cicutti: A case where FOS should be taking a stand

FOS seem to prefer a cash-strapped retired couple to do their dirty work for them.


Being an Italian by birth, I naturally love my old country. But some aspects of life over there leave something to be desired, its legal system in particular.

A friend of mine, born here but of Italian parents, was left a small house in the Puglia region, on the southern tip of the country. The house had long been in the family.

But a few years ago, the land registry mysteriously altered the legal title to the property from my mate’s name to that of another man, who is thought to be connected to local “people who matter”.

The resulting legal battle to have the property put back on my friend’s name has taken many years, with endless lawyers’ letters, adjourned hearings and no outcome in sight.

When my mate last gave me an update about his saga, I commiserated – and remarked casually that had the same story taken place in England it would have taken a matter of months to sort the matter out legally.

Except, of course, the legal system isn’t always a bowl of peaches over here either, especially if you use every legal device to avoid having your financial advice examined by the Financial Ombudsman.

A few months ago I wrote about Graham Davy, a retired airline pilot advised by Brian Pickering at Heather Moor Edgecomb in 2001 to leave his final salary scheme in 2001, after being told that predicted levels of growth of 7 per cent, 9 per cent and 11 per cent for his proposed personal pension were “terribly modest”. 

As I explained in November: “In reality, [Mr Davy] estimates it would cost in excess of £600,000 to give him back the pension lost as a result of the advice he received.”

Back in 2011, when he became aware of his potential to claim, Graham Davy contacted the Financial Ombudsman Service, which in turn wrote to HME.

Instead of responding to the claim, Brian Pickering’s wife Dolly applied to Companies House for HME to be struck off the register. HME was placed in default in 2012. Davy, who may have been in line for the FOS maximum award of £100,000, had his case passed on to the FSCS instead. His potential compensation was reduced to £50,000.

When I wrote about this appalling story, I mentioned that Mr Davy has now had his case reassigned back to him by the FSCS and is trying to get HME restored to the register at Companies House so that he can pursue a case against the company.

A hearing concerning HME is due to take place at Cardiff Civil Justice Centre on Monday 17 February. Graham Davy has contacted the FOS and informed them of what is happening. The FOS has replied that it may be able to reopen the case with HME once the company is restored to the register but only if the assets it owned can be restored to the company.

What is known is that apart from a substantial sum from the sale of HME’s client bank to Sanlam, with some £100m under advice, HME’s other assets included the company office, listed on the balance sheet prior to the dissolution of the company. 

Graham Davy has written to the presiding judge asking him to reinstate these assets as well as restoring the company to the register. As a retired person, without the funds available for a long legal battle, he is representing himself and, in his words, “simply asking the judge to do what we think is right.”

When I spoke to the FOS last year, they told me cases like this, where a company dissolves itself rather than having to face an adjudication, are very rare. One might imagine they would have an interest taking the case on themselves to establish a legal precedent and prevent others from doing the same thing, but clearly they prefer a cash-strapped retired couple to do their dirty work for them.

Except that matters are not so straightforward. Brian Pickering has replied through his compliance adviser, saying that as he ceased to be a director of HME in June 2010 he was no longer answerable to any correspondence sent to him. All letters addressed to him by Mr Davy and the FOS should be disregarded.

Mrs Pickering was the sole director from this date forward and as no letters were addressed to her personally she had no knowledge of any complaint. Therefore she denies that she did not follow the correct procedure when winding up the company. 

At this stage it is not clear what the court will make of this line of argument.

Nic Cicutti can be contacted at



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There are 8 comments at the moment, we would love to hear your opinion too.

  1. I’m sure (or would at least like to think) that the kind of practices outlined above are rare – but that does not make them any less disgusting.

    It should not be legal to wind-up a company once a complaint has been made and relinquish any responsibility you had towards the claimant.

    I know most advisers act with the utmost integrity, but cases like this one highlight that there are some crooks out there. It is most unfortunate that advisers doing great jobs (allowing clients to meet their goals, provide for their families, retire in financial comfort, etc) do not make headlines. The majority of the public will only ever hear these bad news stories.

    That said, I cannot put into words the contempt I feel for the adviser in question here. It sounds as though Mr Davy has had his retirement ruined. If Mr Pickering was confident in the advice he gave, he would not have almost immediately wound-up his company.

    Oh, and his wife wouldn’t have known he was receiving letters from solicitors, FOS, etc?! Disgraceful.

  2. And I would imagine there are other such cases. Strangely enough I wound up a dormant company yesterday and I noted that you cannot do it if the firm is subject to any legal proceedings, current or proposed. So how could Mr Pickering be allowed to wind up his company?

  3. I expect Sam already knows the answer – because an FOS complaint is not a legal proceeding.

    If the FOS wanted it to be a legal proceeding, and to carry the same weight as a legal proceeding – including the ability to stop firms from winding up, etc – it would have to be subject to the law of the land, to the same weight of evidence, and to an open appeals process. Not the whims of its army of temps and the “balance of probabilities”.

  4. Has the complainant made an approach to the liquidator appointed? Did he do so (or those looking after his interests – the FOS or FSCS) during the period of winding-up?

    My understanding is that the liquidator must take all such things into account.

    That said, turning to the case itself, was the advice really ‘bad’ or just circumstances and the transferor know the risks at the time he decided to leave a good salary-related pension scheme with ‘guarantees’ int he pursuit of a better outcome… i mean, really….?! He was not some artisan being encouraged against his will we assume…. and his transfer was after the Pension Review sot he depth of information was extensive, before he made his decision…. did the adviser really say – tell you what, if it/the performance works we’re all happy, if it doesn’t, I’ll indemnify you…. and regardless of the percentage returns and even meeting the targets perhaps, I’ll indemnify you against the colossal cost of reinstating your lost benefits even in the face of annuity rates being the lowest ever as Gilt yields plumb 1.55%…..

  5. Mr Davy the stupid chap didn’t realise moving from a final salary scheme was daft?

    Poor thing. Hardly sounds like the normal thicko advisers screw over.

    Takes two to tango, and one to sign the transfer forms.

  6. Ignoring the merits of the claim this kind of thing happens throughout all industries, to avoid personal injury claims and so on, so why should ours be singled out for special treatment?

  7. I am taking Philips advice here and i am going out tomorrow and selling a shed load of PPI. I dont care there has been a massive outcry about how bad the product is, if people dont know that that is their lookout i mean what are IFA’s there for? to tell people that things are not a good idea???

    And you wonder why people have a bad view of advisers!! How is anyone even contemplating coming onto this site and defending this advice? Are we not fighting to be called professionals? Do we not want to be trusted? and how does saying ‘well it was his own stupid fault’ going to help? Yes the client agreed with the ADVICE and no it wasn’t a good idea, and yes the adviser in question was probably doing this for completely the wrong reasons (massive commission), but at the end of the day he was given ADVICE to transfer out from a PROFESSIONAL and yet you are all laying the blame at the clients door for being greedy!! No wonder no one trusts us.

  8. Where is caveat emptor Matt – let the buyer beware. It has disappeared. Perhaps the plan was miss-sold yes but actually we are told why the client decided to leave the scheme. Remember too that schemes paid away the cash equivalent actuarially calculated value of the benefits foregone…. yes, sure! Perhaps the adviser should have done it ‘execution only’. When you receive your first and subsequent inequitable claims for your professional advice, appropriate in the circumstances, perhaps your tune will change.

    Indeed, are you now giving such politically correct advice so that this too is ‘wrong’ in reality in terms of what is ‘best for the client’ – or am I becoming too cynical!

    On PPI, I was telling people not to have it years before the problems arose….. are pension transfers form salary-related schemes always bad advice then? We don’t advise now as there’s too much vulnerability, even if transfer values have perhaps been at the highest they ever will be and regardless of the individual’s circumstances.

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