Sesame to pay out over missold pension complaint

File image of a pension savings potSesame must compensate a client who complained she was missold a personal pension by one of the network’s former appointed representatives.

According to a Financial Ombudsman Service decision, in 2002, Mrs P met with an adviser of a business that was at the time an appointed representative of Sesame.

Following this meeting Mrs P agreed to transfer her company money purchase pension benefits to a personal pension plan.

In June 2007 the business stopped being connected with Sesame and in July 2016 the advice firm wrote to Mrs P saying her former adviser had been arrested in relation to possible fraudulent activity in respect of financial advice.

The business said it did not think Mrs P had been affected.

In December 2016 Mrs P complained to Sesame the adviser did not properly establish her attitude to risk, where the pension funds were to be invested or explain how fees and charges would affect the returns on her investment.

In May 2017, after investigating the complaint, Sesame wrote to Mrs P upholding her complaint and agreed she had not been suitably advised when she transferred her workplace pension to a personal pension plan.

It offered redress of more than £4,500 but Mrs P was not confident with what had been suggested so she brought her complaint to the FOS.

A FOS adjudicator investigated the case and concluded it should be upheld as Sesame had used an unspecified index to calculate the redress due to Mrs P.

Instead it should have done a loss assessment comparing the actual transfer value of her personal pension plan with the notional transfer value of the benefits if they had remained in her work scheme.

Furthermore Mrs P had raised a complaint about the sale of her pension in part because she was told her adviser had been arrested by the police for fraud some 14 years after the advice that she had received.

This would have been an upsetting situation and Mrs P had clearly been worried she could not rely on being told that she was unaffected – and it then transpired she had been missold her pension.

As a result Mrs P had suffered distress and inconvenience because of the situation and the adjudicator said she should receive £150 compensation.

Sesame disagreed and argued it had dealt with Mrs P fairly and her previous employer’s occupational money purchase scheme had been wound up in 2011.

Sesame had written to the scheme administrator, had been informed that no information about the scheme was available prior to 2006 and this meant Sesame could not work out the notional value.

Consequently an index had to be used instead to determine a notional value in the redress calculation.

When the case was referred to ombudsman Adrian Hudson he ruled in favour of Mrs P and said it was stressful for her to chase the claim.

He adds: “It is important to note that Mrs P had to contact Sesame to complain about the advice that she had received in the past and she was not proactively approached by Sesame. In the circumstances this would have caused some inconvenience.

“The fact that the calculation showed that there was a significant loss would have, in my opinion, caused Mrs P further distress even if Sesame had agreed to make good any shortfall that had arisen as a result.”

Sesame was not available for comment at the time of publication.

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