PensionsDec 3 2015

Fos backs Openwork’s £6k pension transfer fee

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Fos backs Openwork’s £6k pension transfer fee

An Openwork client has been told she will not get a penny back from a £6,000 fee she paid the intermediary to transfer her pension into a self-invested personal pension.

The client, known as Mrs J, complained to the Financial Ombusdman Service that the sum she paid the network bears no relation to the amount of work involved in “a simple transfer”.

An adjudicator initially rejected the complaint, pointing out the fee had been disclosed to Mrs J before the transfer and she ought to have been aware of it.

But Mrs J did not agree, stating that she did not receive advice at the time of the transfer and adding that the pension wrap had already been set up and she was just asking for an existing investment to be transferred to it.

Mrs J said she was not given a copy of the documents she signed to review and only became aware of the fee when she received a plan statement a few months later.

Openwork stated she would have received documents setting out the 3.5 per cent fee at the time of the transfer.

Ms J added the fee equated to an estimated 20 hours of work for the adviser and she did not feel it would have taken this long.

As a result of the parties failing to agree, ombudsman Helen McKenna reviewed the complaint and backed her colleague’s earlier decision to throw it out.

She said that appears that the evidence suggests various options were discussed in the meeting before the transfer was agreed.

“I can see that the fee agreement which Mrs J signed was a one-page document which clearly set out that there would be an initial 3.5 per cent fee and an ongoing 1.5 per cent fee.

“I’m therefore of the view that even if Mrs J didn’t notice this fee in other documents she signed and didn’t receive copies of documents, this fee agreement was very clear and she ought reasonably to have been aware of the 3.5 per cent fee as a result.

On Mrs J’s argument the size of the fee was not justified, Ms McKenna said the fee was for regulated work which the adviser was entitled to charge a fee for, adding: “I think it’s reasonable for Openwork to expect that she would dispute the fee at the outset if she was unhappy with it.”