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True Potential to pay after pension transfer complaint

True Potential has been ordered to compensate a former client who was advised to transfer several pension pots he held into a self-invested personal pension.

The Financial Ombudsman Service has upheld a complaint from Mr C in part because of the failure of True Potential to provide the level of service it promised.

In late 2013, Mr C discussed pension arrangements with TP and was advised to transfer his pension pots, worth more than £51,600, to a Sipp it offered in order to benefit from regular contact with his adviser.

When evaluating the value of his pension pots, TP surmised that he was around £3,700 better off than he would have been if his investments had achieved growth in-line with the Wealth Management Association income benchmark.

However, Mr C argued that the service that he received fell short of what he had been promised, and subsequently instructed TP to move his Sipp to cash in March 2016. Mr C then complained to TP in May 2016, and transferred his Sipp to a new provider in August 2017.

TP had agreed the service it provided had not met expectations, and agreed to refund the £854.91 that had been deducted from Mr C’s pension pot to cover the cost of ongoing advice between February 2014 and February 2016.

In addition to this, TP subsequently increased its offer by £500. This was due to the fact that Mr C’s adviser hadn’t agreed objectives with him at the outset.

The FOS found Mr C was owed an additional £300 for TP’s partial responsibility in delaying the transfer of the SIPP to his new provider, and a further £450.65 for the fees for ongoing advice between when he moved his Sipp to cash in March 2016, and when the Sipp was transferred in August 2017.

This amounted to a total of £2105.56 that Mr C might be owed by TP.

In a provisional decision, Ombudsman Suzannah Stuart didn’t agree that TP should carry out a redress calculation covering the period after he chose to move his Sipp to a cash fund.

Mr C’s new financial adviser says Mr C “just wanted to get his funds away from” TP after experiencing bad service, and also that he “was advised to move to cash purely to avoid the tax position”.

Stuart points out that Mr C could have remained invested and transferred his funds in-specie to his new provider, or he could have moved his funds to cash once a transfer had been arranged. This way Mr C would have not been out of the market for a prolonged period of time.

Furthermore, Stuart questioned why he “didn’t take action to move his Sipp until March 2017 – a year after he had moved his funds to cash”, and surmised that it would be unreasonable to expect TP to compensate Mr C for any loss he incurred as a result of being out of the market between March 2016 and March 2017.

Although the FOS deduced that TP should pay Mr C £300 for the delays he experienced in transferring his SIPP to another provider, it refused to ascribe TP sole responsibility.

Stuart states that Mr C’s new provider “could have been more proactive”, and highlights that the money was transferred from TP less than two weeks after it had received a transfer request from Mr C.

The FOS has concluded that TP is to pay Mr C a total of £2105.56.


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There is one comment at the moment, we would love to hear your opinion too.

  1. Chris Welsford 25th July 2018 at 6:18 pm

    I thought TP was a compliance and back office service provider to directly authorised firms. In which case why is it TP and not the directly authorised firm that is being taken to FOS? Or did TP provide advice services too? Does anyone know?

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