A financial advice firm has been told to make a payment towards one of its clients’ pension after confusion over whether they were the man’s adviser or not.
The Financial Ombudsman Service upheld a complaint against John Lamb LLP after a client claimed it failed to notify him that his pension with Aviva had reached the selected retirement age.
Referred to as Mr S, the client said his funds were moved into cash without his knowledge or consent and as a result he suffered a financial loss.
The confusion surrounded a letter which Aviva sent to advisory firm John Lamb a few months before Mr S’s selected retirement age, which said the savings would be switched into a deposit fund when he reached 55.
But John Lamb said it was not Mr S’s adviser, and was therefore not required to forward on the letter, something ombudsman Adrian Hudson disagreed with.
“I consider that Mr S was still a client of the business and that the letter which it would have realised was important should have been forwarded on to Mr S,” read his decision.
“In my opinion, the letter should have been passed to Mr S so that he could have made an informed choice as to how he would proceed. I consider it likely that he would have taken benefits from the GAR policies at age 55.
“Alternatively, if it believed that it was not Mr S’s adviser I consider that it should have returned the letter to Aviva explaining that it was not Mr S ‘s adviser and that the letter should be sent directly to Mr S by Aviva.”
In 2008, Mr S’s employer appointed John Lamb to wind up an existing Ssas scheme and set up Sipps for the members.
While Mr S had signed an agreement for John Lamb to act as his on-going adviser, before that relationship could be established, Mr S wrote to them indicating that another business would manage his investments.
John Lamb wrote to Mr S in January 2008 and made him aware that his share of the Ssas was over £2m.
The letter pointed out that the Ssas held a number of old executive pension plans worth around £730,000. Of this amount, £360,000 benefitted from a valuable guaranteed annuity rate at age 55 and that was 55 per cent above the current market rate.
Mr Hudson said John Lamb should determine how much Mr S has lost from this mistake and refund him, plus £250 for the inconvenience caused.
