An adviser has been told to compensate a client after recommending he transfer four of his pension plans to another provider.
Financial ombudsman Kim Parsons said the advice given by Park Lane Financial Planning was unsuitable given the client’s circumstances.
In 2012 the client, known as Mr B, was in his mid 50s and took financial advice from Park Lane that led to him transferring his pensions.
Ms Parsons said: “The transfers cost Mr B money. He paid commission and a charge to set up the new plan.
“He appears to have paid higher ongoing charges. I can’t see that there was any reason to incur these costs.
“The four previous plans wouldn’t have been difficult to monitor. Mr B didn’t have an immediate need for income. He didn’t need to transfer his plans to another to reduce risk.
“The few reasons Park Lane gave for its recommendation are not convincing.
“A number of misleading statements had been made.
“These included the nature of the previous funds, the previous returns and commission. The adjudicator considered it likely that Mr B had been misled during the advice process.”
One of the reasons given for the recommendation to transfer the clients pension benefits into the new plan was that it would make his retirement plans easier to monitor.
Mr B said the recommendation was made on the basis that market falls were imminent but Fos felt the potential for market turbulence had been used as a way to justify the transfer, rather than it being of concern to the client.
In response Park Lane Financial Planning disputed the fact Mr B had suffered a loss as a result of the advice, and said he was considerably better off.
It added alternative advice could have been given but that didn’t make the advice it gave unsuitable.
Ms Parsons told Park Lane to compare the performance of Mr B’s investment with that of the FTSE WMA Stock Market Income Total Return index and pay the difference between the fair value and the actual value of the investment.
