True Potential must pay part of a former client’s future advice fee after advising he transfer his pensions to its platform, incurring higher charges and commissions.
True Potential advised the client to transfer his stakeholder pension and his personal pension – worth a total of £134,000 – to its wealth platform.
A Financial Services Ombudsman adjudicator found the pension transfers were not justified and the client’s new financial adviser said True Potential should pay towards the cost of him getting further advice.
The adviser said giving the client suitable advice would take around nine hours at £195 per hour.
However, True Potential did not agree to pay for further advice despite the adjudicator recommending it should pay the client for three hours of advice not nine.
In the final decision notice, ombudsman Keith Taylor agrees with the adjudicator that True Potential should pay the client £585 towards seeking further advice.
He says: “I don’t think True Potential should pay as much as Mr L’s representative says. That’s because Mr L probably would have looked to get some advice about his pension at some point. And any advice would have come at some cost to him and so isn’t wholly down to any poor advice True Potential may have given him.”
Taylor adds: “I can’t say what that advice may cost but he is in a worse position now and True Potential should make some contribution. A contribution of £585 is fair in these particular circumstances.”
True Potential was also ordered to pay the client £250 for any upset and inconvenience caused. It must also put the client in the position he would be in if he was not given unsuitable advice.